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Thursday, 04 March 10
GLOBAL COAL PRICES GETS SUPPORT FROM EM DEMAND
 Commodity Online reported that, AP12 coal prices look well supported in 2010 thanks to positive outlook for Chinese coal demand whereas coal demand in Europe, rest of the world is shockingly low and stocks have hardly drawn despite the coldest winter in decades, according to an analysis by Bank of America- Merrill Lynch (BofAML).
Japan, by far the biggest importer of thermal coal, cut back on its appetite for coal by almost 20 million mt last year, to 117million mt. Europe took in 22 million metric tons less last year, driven particularly by Spain, Italy, the UK and France as low natural gas prices supported switching out of coal in the power sector
Last year China imported 70.4 mn mt of thermal coal, relative to outflows of 7.8 mn in 2008. China's imports will witness slowdown due to ramping up of internal proudction, according to BofAML.
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“Last year China imported 70.4 mln mt of thermal coal, relative to outflows of 7.8 mln in 2008. China's imports will witness slowdown due to ramping up of internal production” - BofAML
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Coal prices are protected to the downside by the high marginal cost of production, particularly in Russia. However, the oversupply in Europe will likely keep a lid on API2 prices near-term.
API2 front month coal increased from a low of $75/mt in mid December to $97/mt in early January, sharply outpacing other energy markets. Heavy snowstorms led to local power shortages, particularly in the South of the country.
Perhaps more importantly, a much stronger-than-expected cyclical rebound in China drove power generation growth to new highs, up 33% YoY over the past three months, helping to fuel coal demand. Other Asian countries also experienced a turn-around in electricity generation. In turn, due to the heavy snowfall and rail constraints, China resorted to seaborne coal as opposed to domestically produced material. Elsewhere, a glaringly cold winter in Europe provided some support to sentiment. Producer infrastructure constraints, particularly in Australia, South Africa and Indonesia, temporarily tightened the international coal market.
Ultimately, the 3-week rally in coal did not last and prices reversed sharply in mid January as the snowfalls in China receded and the USD strengthened. In recent weeks, front-month API2 coal traded down to $72.75/mt and has been in the $72/mt to $79/mt range. Chinese imports in January, though still at a very high level, cooled off month-on-month basis. Moreover, big European coal users, like Germany, France and the UK, recorded steep demand losses in January, at a time that they experienced the sharpest winter in decade, BofAML analysis said.
In the UK for instance, coal demand in December equalled 4.6 million mt, down from 6.3 million mt in the prior year. Preliminary data indicates that the trend continued over the past weeks.
Traditional European coal suppliers are doing what they can to manage supply to Europe. Russia has reportedly closed some mines to keep exports to Europe low. South Africa is actively diversifying away from Europe towards demand outlets in Asia Pacific. During 2009, 31% of South African exports went to India, from virtually nothing in previous years. That trend was particularly pronounced over the past months. Although in small volumes, South Africa has also been pushing material into China. More absurdly, Colombia-- who typically exports 50-60% of their coal to Europe with the balance going to the Americas--
has now detected interest in Asia.
Colombia exported small volumes to China in December to the tune of 1.5-1.7 million mt, for the first time ever. Of course, sharply lower freight rates are helping these trade flows. As we see continued supply of new Capesize vessels in 2010, freight will likely remain cheap by historical standards in the near-term. Once freight recovers, possibly at the end of this year with the cyclical demand recovery soaking up the supply in ships, these trade-flows are unlikely to be sustainable.
Europe's coal inventories remain at excessive levels at key import ports in Rotterdam and Amsterdam as supply exceeds demand. BofAML sses strong relationship between spreads in AP12 and coal inventories. Hence it is no surprise that the contango in API2 has steepened even more, with front month to front calendar year spreads at the widest since July last year , reflecting the oversupply in the European market and bulging inventories.
Coal markets in the Pacific are a lot tighter, with inventories relatively low in key coal consumers like China, India and South Korea. Meanwhile, the Newcastle coal market is trading in backwardation. Several coal mines in Australia had to declare force majeure in response to severe rainfalls on the east coast which flooded mines, while major rail lines had to close, clogging up the coal chain infrastructure. 47 vessels are currently again lining up outside Newcastle , underscoring that infrastructure problems will not go away easily, BofAML analysis said.
Overall, the outlook for emerging market coal demand remains very positive though. China is expected buy more seaborne coal as as the Chinese Renminbi is likely to be revalued by mid year. In BofAMl analysis, a CNY revaluation is undoubtedly positive for global thermal coal prices. Other EMs likeMexico and Turkey are sharply ramping up coal imports. India continues to suffer from a negative coal balance and will have to rely on the seaborne market for supplies. On a medium-term horizon, we believe that global seaborne coal prices have immense upside from the current level given the growth in coal-fired generation capacity.
Source:Commodity Online - By Madhurima R S
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Tuesday, 09 March 10
MINING LAW OPTIMIZES SECTOR
Law No. 4 / 2009 on Mineral and Coal Mining have given a new direction for the future of mining in Indonesia, including Domestic Market Obligation, ...
Tuesday, 09 March 10
STRONG REBOUND IN ALL THE DRY BULK SEGMENTS THIS WEEK
There was a strong rebound in all the dry bulk segments this week, leading to an 18% jump in the Baltic Dry Index.
The Cape and Panamax markets s ...
Tuesday, 09 March 10
L&T POWER EYEING COAL MINES IN AUS, INDONESIA
L&T Power Development Company, a part of the Larsen & Tubro Group, plans to acquire coal mines in Australia and Indonesia, a top company off ...
Tuesday, 09 March 10
BHP AGREES SHORTER-TERM COAL DEALS WITH EUROPEAN, ASIAN CUSTOMERS
Diversified miner BHP Billiton on Monday reported that it had reached sales terms for a significant portion of its hard coking coal volumes for 2010 ...
Monday, 08 March 10
KPCL TO IMPORT 0.9 MILLION TON OF 6000 GCV COAL
COALspot.com: India's Karnataka Power Corporation Ltd is seeking to import 0.9 million metric tons of 6000 kcal/kg (adb) Gross Calorific Value stea ...
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- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- SMC Global Power, Philippines
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Thai Mozambique Logistica
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Mjunction Services Limited - India
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Indonesian Coal Mining Association
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
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