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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, 08 February 10
BLACK RIDGE MINING APPOINTS INDEPENDENT CONSULTANT
Australian-listed Black Ridge Mining has announced the appointment of David Tuit as an independent consultant to assist with the assessment of the c ...
Monday, 08 February 10
SOUTH AFRICAN EXPORT COAL RISES FOR FIRST TIME IN FOUR WEEKS
Prices for coal shipped from South Africa’s Richards Bay, the continent’s biggest export facility for the fuel, posted their first gain ...
Monday, 08 February 10
NTPC HOPES TO START ON 500-MW PROJECT IN SRI LANKA BY FEB-END
NTPC sources told Business Standard, “All formalities from our government and NTPC have been completed.
The opinion of the Sri Lankan atto ...
Sunday, 07 February 10
AN AUSTRALIAN FIRM HAS SIGNED A $60BN DEAL TO SUPPLY COAL TO CHINESE POWER STATIONS
Clive Palmer, chairman of the company, Resourcehouse, said it was Australia's "biggest ever export contract".
Under the deal, the firm ...
Saturday, 06 February 10
FREIGHT WOULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR SHIPPING
COALspot.com (Singapore): The freight market continued to soften this week including the stock markets. The main reason seems to be Chinese ne ...
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- Cigading International Bulk Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- European Bulk Services B.V. - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Pipit Mutiara Jaya. PT, Indonesia
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Interocean Group of Companies - India
- Jindal Steel & Power Ltd - India
- White Energy Company Limited
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Posco Energy - South Korea
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sojitz Corporation - Japan
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Planning Commission, India
- Deloitte Consulting - India
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- The University of Queensland
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
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