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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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- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- White Energy Company Limited
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Australian Coal Association
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Orica Australia Pty. Ltd.
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Kepco SPC Power Corporation, Philippines
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Xindia Steels Limited - India
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