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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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Saturday, 06 February 10
COAL MINISTRY SEEKS CUT IN IMPORT DUTY
The coal ministry wants the finance ministry to reduce the 5.1% import duty on thermal coal and continue with the existing zero import duty on cokin ...
Friday, 05 February 10
IN 2010, CHINA COAL OUTPUT TO REACH AROUND 3.3BLN T
It is expected that China's coal production in 2010 will reach around 3.3bln tons. It is predicted that in the first quarter of 2010, the tight coa ...
Thursday, 04 February 10
INDIA REMAINS FIRM - FEARNRESEARCH
CHARTERING - DRY BULK
Handy
The BSI has continued it´s downward movement for 2 weeks now.Nevertheless activity in the atlantic remains bu ...
Thursday, 04 February 10
INFRASTRUCTURE DEVELOPMENT & INFRASTRUCTURE ASIA 2010
ASIA-PACIFIC MINISTERIAL CONFERENCE ON PUBLIC-PRIVATE PARTNERSHIPS FOR INFRASTRUCTURE DEVELOPMENT & INFRASTRUCTURE ASIA 2010
IPFA TO JOIN INF ...
Thursday, 04 February 10
INDIA`S APPETITE FOR COAL EXPECTED TO RISE SHARPLY
Coal powers more than half of India's electricity plants and demand for the commodity is expected to rise sharply as the third-largest Asian econom ...
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- Parliament of New Zealand
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
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- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
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- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Sojitz Corporation - Japan
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- MS Steel International - UAE
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
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