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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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Wednesday, 02 June 10
PLN TO DEVOUR 133 PERCENT MORE COAL IN NEXT FIVE YEARS
The Jakarta globe reported that, State electricity company PT Perusahaan Listrik Negara will more than double the amount of coal it uses over the ne ...
Tuesday, 01 June 10
LANCO INFRATECH PLANS POWER PROJECTS IN COASTAL REGIONS
My digital reported that, Hyderabad-based Lanco Infratech will set up power projects in coastal regions based on imported coal. The company is ...
Monday, 31 May 10
NEWCASTLE WEEKLY EXPORTS RISE; SHIP QUEUE SHORTENS
Business week reported that, Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel used in powe ...
Saturday, 29 May 10
FREIGHT MARKET SEEMS TO BE STABILIZING - CAPT. REDDY
COALspot.com: The week was clearly for Cape which went up by almost 21 pct . The BDI was up only by 6 pct.
The other sectors were under pressure ...
Friday, 28 May 10
BERAU COAL GROUP SEEKS US$ 700 M LOAN
PT Bukit Mutiara has decided to revise down its bond issue from US$600 million to US$400 million. In total, it is seeking US$700 million of debt, co ...
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- Siam City Cement - Thailand
- Trasteel International SA, Italy
- PTC India Limited - India
- London Commodity Brokers - England
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- VISA Power Limited - India
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- Sical Logistics Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Coalindo Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Planning Commission, India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- The Treasury - Australian Government
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
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