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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, 18 February 10
COAL MINERS FACE SHUTDOWN OVER RECLAMATION FUNDING
Three coal mining companies may be forced to temporarily stop operations this year if they fail to provide funding for a site-reclamation program.
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Thursday, 18 February 10
DECOUPLING FROM OIL PRICES ON STRONG GLOBAL ENERGY DEMAND
A recent coal market conference in Singapore focused on two main issues –— the demand for coal as a source of energy, and coal pricing.& ...
Thursday, 18 February 10
INDONESIA TO INVITE BIDS FOR $1.5 BLN COAL RAILWAY IN MAY
Indonesia plans to invite investors to bid for contracts to build a $1.5 billion coal railway line in Central Kalimantan, a planning ministry offici ...
Thursday, 18 February 10
INDONESIA ZONING RULE THREATENS MINING - INDUSTRY
Reuters reported that, confusion over a new Indonesian land use regulation could halt the operations of some mining firms, providing a new threat to ...
Wednesday, 17 February 10
LAND OVERLAPPING UNAVOIDABLE
Land overlapping issues in the mining industry is unavoidable due to the availability of mineral, coal, and oil resources which are often located be ...
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- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- The Treasury - Australian Government
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- Australian Coal Association
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
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