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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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Thursday, 04 February 10
NO AMDAL, NO COAL MINING IN KALIMANTAN: MINISTRY
To prevent further environmental damage, the government has said it would revoke the licenses of mining firms operating in Kalimantan that do not ha ...
Thursday, 04 February 10
ANTICIPATING DOMESTIC COAL DEMAND
Indonesia has an abundant amount of coal reserves, which in 2008 is estimated at 7,12 billion tones. Coal production in 2008 reached 231,18 mi ...
Wednesday, 03 February 10
CHINA'S MAIN COAL PRICES FALL AS WINTER DEMAND EASES
Weekly coal prices at China's Qinhuangdao port, a benchmark in the world's biggest producer and consumer of the fuel, fell for the first time in s ...
Wednesday, 03 February 10
NEWCASTLE COAL EXPORTS RISE 3%; SHIP QUEUE SHORTENS
Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, increased 3 percent last week while the ...
Wednesday, 03 February 10
INDONESIA BUKIT ASAM SEES DOUBLE DIGIT 2010 REV GROWTH
* 2009 net profit rose an estimated 50 pct
* Sees opportunities for overseas acquisitions
Indonesian state-owned coal miner Bukit Asam saw 2009 ...
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- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Economic Council, Georgia
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- PTC India Limited - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Australian Coal Association
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
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