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Friday, 05 March 10
COAL RALLY ON CHINESE DEMAND SPARKS $59 ESTIMATES
 Bloomberg reportd that, A rally that has boosted coal prices 21 percent from their lows last year may have further to go as the coldest U.S. winter in nine years and China’s record imports increase demand and drain stockpiles.
Prices will average $59.28 a ton this year, up 17 percent from $50.75 as of Feb. 19 on the New York Mercantile Exchange and 41 percent more than last year’s low in April, according to the median of 11 analyst estimates in a Bloomberg News survey. Stockpiles at utilities swelled last year after a mild summer and the economic recession reduced power demand.
China, the world’s biggest coal user, imported 16.4 million metric tons in December, a sixfold increase from a year earlier, customs data show. Record snowfall buried parts of the U.S., the second-biggest coal consumer, including Dallas and the mid- Atlantic states. The cold weather is reducing a surplus and giving producers Patriot Coal Corp., Consol Energy Inc. and Alpha Natural Resources Inc. power to negotiate higher prices.
“We’re definitely bullish for a confluence of factors,” said Jeremy Sussman, senior coal analyst at Brean Murray Carret & Co., a New York-based boutique investment bank. “We can see the light at the end of the tunnel in the U.S. The weather has definitely had an impact. The international market is front and center.”
Consol, the second-biggest U.S. coal company by market value, will jump 18 percent to $59 by the end of this year in New York trading, according to the median of 17 analyst estimates compiled by Bloomberg. Alpha, the third-biggest U.S. coal producer by output, will climb 22 percent to $57.46, analysts forecast.
Patriot Rises
Patriot rose 35 cents, or 2 percent, to $17.62, today in New York Stock Exchange composite trading, the highest price since Jan. 21. Consol added 3 cents, to $49.94. Alpha slipped 16 cents, or 0.3 percent, to $46.94. Massey Energy Co., the sixth- biggest U.S. coal producer, climbed 12 cents, or 0.3 percent, to $44.39.
Hedge funds have been buying energy producers, mining companies and airlines, a sign that managers from Louis Bacon to David Tepper are convinced the economy will accelerate. Duquesne Capital Management LLC, led by Stanley Druckenmiller, bought 6.2 percent of Massey, whose earnings are projected to double this year.
The increased U.S. and Chinese consumption prompted Michael Dudas, an analyst at Jefferies & Co. in New York, to raise his 2010 price target for coal to $70 per ton, a figure he originally forecast for 2011.
Coal Inventories
“The weather and better electricity generation have pushed stockpiles lower than people anticipated,” said Dudas, who has followed coal for a decade. “It’s really just accelerating that price.”
Utilities have 57 days worth of coal on hand, down from more than 70 days at the start of winter, according to Genscape Inc., a Louisville, Kentucky-based energy data provider.
“The pricing increases are real,” Consol Chief Operating Officer Nicholas Deiuliis said in a telephone interview. “If you look at the pricing increases we’re seeing now in regard to future sales, they have not only floored or held their bottom, they are starting to spike up.”
Coal is used to generate electricity and produce steel, making it a barometer for the economy. U.S. steel capacity utilization tumbled to 68 percent as of Feb. 15 from 91 percent in August 2008, according to the American Iron and Steel Institute, as unemployment climbed to 10 percent and consumers reduced spending 3 percent on appliances in December from a year earlier.
Prices Slide
The U.S. summer from June through August was 7 percent cooler than the same period a year earlier, reducing demand for power to run air conditioners, according to the National Oceanic and Atmospheric Administration.
Prices plunged 66 percent to $48.15 per ton at the end of 2009 from a record $143 on July 1, 2008, the steepest decline in at least eight years, according to data compiled by Bloomberg. The 17 percent gain forecast by analysts would be the largest since 2007.
Utilities amassed a record 207 million tons as demand for coal to generate electricity dropped 12 percent through Sept. 30, according to the most recent U.S. Energy Department data. Consumption for 2009 was projected to be below 1 billion tons for the first time since 1995. The government will release final figures in March.
Producers cut back output as demand slumped and that’s having an impact even as demand rises. U.S. coal production will slump about 2.8 percent this year just as exports increase 5.6 percent, the Energy Department said Feb. 10.
Record Snowfall
The 2009-2010 winter season, which began Dec. 1, is the coldest since the 2000-2001 season and ranks in the coldest third of winters in the past 115 years, according to Jeff Masters, director of meteorology for Weather Underground Inc., a private forecaster based in Ann Arbor, Michigan.
The federal government shut down for four days this month after Washington was hit with a storm that set a seasonal snow total of 54.9 inches, shattering a 110-year-old record.
For St. Louis-based Patriot, Pittsburgh-based Consol and Alpha, based in Abingdon, Virginia, the frigid conditions are providing relief.
“The cold weather is the best thing they can get right now that’s not a full economic recovery,” said Daniel Scott, an analyst at Dahlman Rose & Co. in New York. “People are no longer scared to talk about thermal coal.”
Interest Rates
The risk to forecasts for higher coal prices is a glut of natural gas in the U.S. and prospects for the economy to stumble as the Federal Reserve boosts interest rates for the first time since June 2006. The Fed last week raised the discount rate charged to banks for direct loans by a quarter point to 0.75 percent to encourage banks to borrow in private markets.
“If the economy tanks again, that changes the outlook,” according to James Rollyson, senior coal analyst at Raymond James Financial Inc. in Houston. “The economy and particularly this year natural gas prices are the variables. Coal lost market share to natural gas because we averaged $4 gas for the year.”
The U.S. relies on coal for about half of its power generation, compared with about 20 percent for gas.
Gas has to stay above $5 per million British thermal units to prevent it from being more attractive to utilities at the expense of coal. Natural gas for March delivery fell 14.9 cents, or 3 percent, to $4.895 per million Btu. Rollyson estimates that through November coal lost about 40 million tons worth of demand to gas.
Chinese Imports
China’s National Energy Administration said Jan. 25 that a coal shortage will persist through March. The country has maintained the record import pace set in December because of the country’s coldest winter in at least 50 years, according to Sutthichai Kumworachai, an analyst with KGI Group in Bangkok.
The country’s gross domestic product expanded 10.7 percent last quarter from a year earlier, the fastest pace since 2007, after the government introduced a $586 billion stimulus package that spurred energy consumption.
China’s appetite for coal led to imports from South Africa, diverting supplies from Europe and creating an opportunity for eastern U.S. coal companies such as Alpha Natural Resources, Consol and Patriot to increase sales across the Atlantic Ocean, Brean Murray Carret’s Sussman said.
This year Consol has sold almost 500,000 tons of coal into Asian markets, a 23 percent increase from the 400,000 tons that it shipped to the region for the first time last year, Dan Zajdel, a company spokesman said. As more companies follow, the exports will squeeze U.S. utilities, said Pearce Hammond, an analyst at Simmons & Co. International in Houston.
Lower Temperatures
“That’s essentially robbing utilities of coal,” Hammond said. “They don’t need it right now, but in the future they will.”
From the mid-Atlantic to the Southeast through the Gulf Coast into Texas, temperatures are averaging 4 degrees to 8 degrees below normal, said Tom Kines, a senior expert meteorologist with AccuWeather.com in State College, Pennsylvania.
“That is pretty significant,” he said.
The cold is having an impact as measured by heating-degree- day values, which have been trending higher along the East Coast and across the South, according to the National Weather Service. The value is calculated by subtracting the average daily temperature from a base of 65 degrees and is designed to show energy demand.
New York Weather
This month, New York’s heating-degree-day value is 572, or 36 greater than normal, according to the National Weather Service.
Coal prices will get a larger boost if the U.S. economy can sustain its recovery, Alpha Chief Executive Officer Kevin Crutchfield said in an interview. The world’s largest economy will grow 3 percent this year and next, according to the median estimate of 62 economists surveyed by Bloomberg News.
“That would be the best thing in the quiver, a bona-fide economic recovery, especially on the industrial side,” Crutchfield said. “If you see any type of economic stimulus and economic recovery at all, that would hasten the recovery even faster.”
Source: Bloomberg - Mario Parker
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Thursday, 10 June 10
CHARTERERS ARE NOT WILLING TO PAY THE RATES AS MARKET SLIDES
DRY BULK
Handy
Atlantic markets are quieter (Posidonia?) with less activity. Nevertheless expect some fresh enquiries f ...
Thursday, 10 June 10
R-POWER, INDONESIA'S SUGICO INK PACT TO ACQUIRE COAL MINES - ECONOMIC TIMES
Economic Times of India reported that, Anil Ambani-owned Reliance Power has signed a share-sale agreement with Indonesia’s Sugico Group to acq ...
Thursday, 10 June 10
PARAMOUNT MINING CORPORATION REPORTS KEY INDONESIAN JV AGREEMENT
Indonesia focussed Paramount Mining Corporation has reported that its Indonesian subsidiary, PT Paramindo, has concluded a Joint Venture Agreem ...
Wednesday, 09 June 10
INDIA, CHINA TO PROP UP THERMAL COAL DEMAND - COMMODITY ONLINE
Commodity Online : Weakness in thermal coal demand in OECD will continue to be offset by growth in demand in India and China. Therefore, the s ...
Tuesday, 08 June 10
TATA POWER LOOKING TO PICK UP STAKE IN OVERSEAS COAL MINES - ECONOMIC TIMES
Economic Times reported that, Tata Power is looking for a strategic stake purchase in coal mines of Indonesia or South Africa to fuel its upcoming 1 ...
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- Orica Mining Services - Indonesia
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- Tata Chemicals Ltd - India
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- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
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- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
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- Indogreen Group - Indonesia
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
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- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Wood Mackenzie - Singapore
- Singapore Mercantile Exchange
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
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- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- White Energy Company Limited
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
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- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
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- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- London Commodity Brokers - England
- Central Electricity Authority - India
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Baramulti Group, Indonesia
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- The University of Queensland
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
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