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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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Tuesday, 19 January 10
COAL FOR DOMESTIC USERS
While the government is already almost a year behind schedule in issuing regulations to implement the new mining law, mineral producers have been&nb ...
Tuesday, 19 January 10
RISING DEMAND FROM POWER FIRMS TO PUSH COAL PRICES
The resurgence of the Chinese economy, along with harsh winter conditions across the country, is likely to push coal prices up in the short term. In ...
Tuesday, 19 January 10
ESSAR'S MEGA ACQUISITION PLANS
India’s Essar Group has carved a mega plan that includes a slew of acquisitions and investments in assets across various businesses. CNBC-TV18 ...
Monday, 18 January 10
INDONESIA SHIPPED 15.90 PERCENT OF TOTAL COAL EXPORTS IN 2009 TO INDIA
COALspot.com (Indonesia): Indonesia, the world largest coal exporter, exported 19.07 percent of the total coal export in 2009 to China and 15. ...
Monday, 18 January 10
BHP TO SPEND $267 MILLION ON QUEENSLAND COKING COAL
BHP Billiton Ltd, the world’s largest mining company, will spend $267 million to accelerate development of the Caval Ridge mine and the Hay Po ...
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- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Indonesian Coal Mining Association
- White Energy Company Limited
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Economic Council, Georgia
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Rio Tinto Coal - Australia
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Neyveli Lignite Corporation Ltd, - India
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
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