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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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Friday, 22 January 10
ENERGY ADVISORY COUNCIL MULLS - COAL EXPORT BAN
The National Energy Council, which advises the House of Representatives and the president on energy issues, has begun to debate a proposal to ban ex ...
Friday, 22 January 10
MERCATOR EYES MORE COAL MINES IN INDONESIA
India’s second-largest private shipping company Mercator Lines is looking at acquiring more coal mines in Indonesia as part of its strategy&nb ...
Friday, 22 January 10
BHAKTI ENERGI IN TALKS OVER COAL VENTURES IN KALIMANTAN
PT Bhakti Energi Persada, one of Indonesia’s biggest miners of brown coal, revealed on Thursday that it was in talks to form a joint venture w ...
Friday, 22 January 10
SHENHUA ENERGY 09 YIELDED 210MN TONS COMMODITY COAL
China Shenhua Energy Co., Ltd. yielded 210 million tons of commodity coal in 2009, hiking 13.2% year on year, the Chinese energy titan announced tod ...
Friday, 22 January 10
JSW ENERGY TO INVEST RS 4,500 CRORE IN COAL MINES ABROAD
The Sajjan Jindal-promoted JSW Energy is planning an investment of Rs 4,500 crore (US$ 978,260,869) to acquire coal mines abroad and another of Rs 1 ...
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- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Oldendorff Carriers - Singapore
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- The University of Queensland
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