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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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Thursday, 04 March 10
BANPU KEEPS JORONG OUTPUT AT 2M TONNES
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is maintaining an output target of 2 million tonnes this year from its Jorong mi ...
Thursday, 04 March 10
THE INDIAN MARKET WAS STILL STRONG - FEARNRESEARCH
HANDY
Activity has gradually improved in the Atlantic throughout the week. All areas&n ...
Thursday, 04 March 10
THREE NEW GLOBAL PRICES INDEXES FOR COKING COAL
Commodity Online reported that, On February 26, Energy Publishing Co. broke new ground in the coal-marketing industry when it began publishing three ...
Tuesday, 02 March 10
INDIA WAS AGAIN THE WINNER IN THE EAST, WITH SUPRAMAXES FIXING CLOSE TO US$40,000/DAY FROM THE WEST COAST
There was little movement in the BDI this week but behind the scenes, the Supramax and Handy size segments posted significant gains, correcting the ...
Tuesday, 02 March 10
INDONESIA'S PROTECTED FORESTS NOW OPEN TO DEVELOPMENT
The Jakarta Globe reported that, President Susilo Bambang Yudhoyono has signed a decree to allow mining, power plants and other projects deemed stra ...
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- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Australian Coal Association
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Planning Commission, India
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- Central Electricity Authority - India
- VISA Power Limited - India
- Tata Chemicals Ltd - India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- White Energy Company Limited
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
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