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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, 25 May 10
KALIMANTAN COAL RAIL PROJECT RUNS INTO COST DELAY - THE JAKARTA GLOBE
The Jakart globe reported that, A$1.5 billion coal rail and port project planned for Central Kalimantan may be delayed by a year after a review of t ...
Tuesday, 25 May 10
BUMPER YEAR PREDICTED FOR INDONESIAN COAL - THE JAKARTA GLOBE
The Jakarta globe reported that, In The country’s coal output may reach 320 million tons this year, up from 300 million tons in 2009, as produ ...
Tuesday, 25 May 10
CHINA'S COAL SHIPMENTS VIA ITS MAIN PORTS RISE BY 13.1 PERCENT IN APRIL
According to the data issued by China's Ministry of Industry and Information on May 21, in April total coal shipments via China's main ports reach ...
Monday, 24 May 10
SAMTAN TO SELL KIDECO TO INDIKA ENERGY?
Insider Stories reported that, Parent company of Indonesia's coal mining contractor PT Petrosea Tbk (PTRO), PT Indika Energy Tbk (INDY) aims to boo ...
Monday, 24 May 10
INDIA'S ESSAR SHIPPING BEGIN COMMERCIAL OPERATIONS OF BULK TERMINAL AT HAZIRA
COALspot.com: Essar Shipping Ports & Logistics Ltd. commences commercial operations of Essar Bulk Terminal at Hazira, one of India's largest dr ...
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- Star Paper Mills Limited - India
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- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
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- Renaissance Capital - South Africa
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- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
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- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
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- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Mjunction Services Limited - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Oldendorff Carriers - Singapore
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Bulk Trading Sa - Switzerland
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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