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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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Wednesday, 27 January 10
PEABODY ENERGY EYES 'RED HOT' ASIAN COAL DEMAND
US miner Peabody Energy has seen already-strong Asian markets become “red hot”, as demand for metallurgical and thermal coal strains sup ...
Wednesday, 27 January 10
KOLKOTTA BASED POWER UTILITY CESC LOOKING FOR 100,000 MT OF COAL FOR MAY & JUNE DELIVERY
COALspot.com (India): Kolkotta based power utility CESC, the flagship company of the diversified RPG group of India, has issued a closed tender to b ...
Tuesday, 26 January 10
FREIGHT COST ERODES INDIA CEMENTS NET
"Freight cost increased from an average of around 14% of sales in the previous quarters to around 20% in the third quarter"
The Decembe ...
Tuesday, 26 January 10
VITOL BUYS EXPORT SPACE AT COLOMBIA SANTA MARTA PORT
Global energy trader Vitol has signed a four-year deal to take export capacity at Colombia's 3 million tonnes a year Carbonsan port in Santa Marta, ...
Tuesday, 26 January 10
AUSTRALIAN FIRM TO MINE COAL IN WEST BENGAL
India Resources Ltd (IRL), a mining firm listed on the Australian Stock Exchange, has decided to enter into contract mining of coal in
India ...
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- Bukit Makmur.PT - Indonesia
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Energy Link Ltd, New Zealand
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Coal Blending Company Limited - Australia
- Coalindo Energy - Indonesia
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- CIMB Investment Bank - Malaysia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
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