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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, 21 January 10
HANDYMAX - SHORT PERIOD OWNERS IDEAS ARE AROUND MID/LOW 20S - FEARNLEYS AS
HANDY
The BSI moved in a downward direction since last Friday reflecting minor a ...
Thursday, 21 January 10
ASF GROUP TO COMMENCE COAL SALES TO CHINA BY FEBRUARY 2010
Sydney-based China energy and resource conduit, ASF Group has struck an agreement to supply coal to China.
In September 2009, ASF announced a ven ...
Thursday, 21 January 10
INDONESIA BUKIT ASAM AGREES ON LOWER COAL PRICE
Indonesian state coal miner PT Tambang Batubara Bukit Asam Tbk has agreed with a local power plant to set 2010 coal prices at 23 percent lower than ...
Thursday, 21 January 10
CABOTAGE POLICY POSTPONED
The Transportation Ministry has decided to postpone for one year the full enforcement of the cabotage principle – a maritime term for the proh ...
Thursday, 21 January 10
MEC IN TALKS WITH TATA POWER ON COAL - TRADE
The UAE's Middle East Coal is in talks to supply coal to Tata Power, India's biggest private sector power firm, from its new Indonesian operations ...
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- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- White Energy Company Limited
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Medco Energi Mining Internasional
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Kaltim Prima Coal - Indonesia
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Xindia Steels Limited - India
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
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