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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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Tuesday, 08 June 10
RUSSIA REPORTED A TENFOLD GROWTH IN COAL EXPORTS TO CHINA IN 1Q 2010 - BRS
A retreat for all the dry bulk segments this week, but especially for the Panamax and Supramax markets. The Panamax 4TC remains over US$30,000/day h ...
Monday, 07 June 10
SOUTH AFRICA COAL STAYS NEAR 18-MONTH HIGH ON EUROPEAN DEMAND - BLOOMBERG
Bloomberg Reported that, Prices for coal shipped from South Africa’s Richards Bay, the continent’s biggest export facility for the fuel, ...
Sunday, 06 June 10
THE DOWNWARD TREND FOR S6 AND S7 ROUTE IS LIKELY TO CONTINUE NEXT WEEK - VISTAAR
COALspot.com: "This seemed market heading for corrections with all sectors down", said, Capt. Reddy, MD of Vistaar Shipping Singapore, an ...
Sunday, 06 June 10
STEAM COAL MAY BECOME NEXT BOOMING COMMODITY IN AUSTRALIA - DB
Deutsche Bank predicts that thermal coal could become Australia's next booming commodity. The German investment bank's global thermal coal team ex ...
Friday, 04 June 10
INDO/INDIA AROUND THE MID 20'S LEVEL AND MID TO HIGH 20'S INDIA/CHINA
Handy
After a quiet end to last week, the Atlantic handysize market continued&nb ...
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- Bhoruka Overseas - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- MS Steel International - UAE
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Planning Commission, India
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Barasentosa Lestari - Indonesia
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
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