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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, 16 February 10
KPMG PENS 6-POINT STRATEGY FOR COAL INDIA RESTRUCTURING
Coal India Ltd (CIL) has appointed KPMG Advisory Services Pvt Ltd to advise on consolidating its position as the country’s prime energy provid ...
Monday, 15 February 10
MINING LAW TO BE REVISED
Law No. 4 of 2009 on mineral and coal mining will be revised after a working visit of the Bangka Belitung (Babel) Provincial legislative assembly (D ...
Monday, 15 February 10
EURO COAL PRICES SOFTEN AS CHINESE LUNAR NEW YEAR HOLIDAYS START
Prices of prompt cargoes of coal for delivery into Europe weakened last week on a lack of European demand and market nerves over the possible impact ...
Monday, 15 February 10
INDONESIAN COAL SUFFERS SETBACK AS SUMATRA RAIL LINE HELD UP AGAIN
State-owned coal miner PT Tambang Batubara Bukit Asam’s $1.06 billion rail project in Sumatra faces more delays, and the cost of the project i ...
Monday, 15 February 10
MEC INFRA TO COMMISSION INDONESIA RAIL PROJECT
A joint venture between Ras Al Khaimah Investment Authority (Rakia) RAK Investment Authority and Minerals Energy and Commodities Holdings, a f ...
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- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- Sical Logistics Limited - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Kalimantan Lumbung Energi - Indonesia
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- Marubeni Corporation - India
- PTC India Limited - India
- Central Java Power - Indonesia
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Carbofer General Trading SA - India
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Energy Link Ltd, New Zealand
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Makarim & Taira - Indonesia
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Indogreen Group - Indonesia
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
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