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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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Monday, 15 February 10
INDONESIA IN TALKS TO RESOLVE BANPU MINE CLOSURE
Indonesia is seeking to resolve a land permiting problem resulting in the closure of a coal mine in Kalimantan operated by a unit of Thailand's top ...
Monday, 15 February 10
PVT ENTRY IN COAL MINING TO BE DELAYED
Entry of private players in coal mining will be delayed. Contrary to expectations, the coal ministry will not move in the Budget session a bill that ...
Sunday, 14 February 10
NEWCASTLE STEAM COAL TRADES AT US$ 91 TO US$ 92
Reuters reported that prompt cargo prices for coal delivered into Europe were largely unchanged recently after a day of subdued trading.
European ...
Saturday, 13 February 10
THE FREIGHT MARKET CONTINUED TO BE WEAK THIS WEEK - CAPT. REDDY
COALspot.com (Singapore): The freight market continued to be weak this week. There have been quite a few spot vessels open Far east and have been fo ...
Saturday, 13 February 10
INDONESIA ISSUES NEW MINING REGULATIONS
Indonesia has issued two new regulations under its mining law to allow firms to start obtaining mining permits, in a move that should increase certa ...
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- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Australian Coal Association
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Parliament of New Zealand
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Wilmar Investment Holdings
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Toyota Tsusho Corporation, Japan
- Coal and Oil Company - UAE
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
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