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