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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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Monday, 17 May 10
INDONESIA SHIPPED 15.51 PERCENT LESS COAL IN APRIL THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23,331,542 MT of coal in April 2010, compare to 27.61 million tons in ...
Monday, 17 May 10
S. AFRICA CUTS EUROPE COAL SUPPLY, ASIA SALES RISE, TRADER SAYS - BLOOMBERG
Bloomberg reported that, South Africa’s Richards Bay Coal Terminal, Europe’s biggest source of the fuel burned for power, cut shipments ...
Monday, 17 May 10
GREEK CRISIS TO SEE FREIGHT RATES FALL BANGKOK POST
The Greek debt crisis will likely cause shipping rates to fall this quarter enabling SET-listed Precious Shipping Plc to buy second-hand vessels at ...
Monday, 17 May 10
NEWCASTLE COAL QUEUES COULD BE HISTORY - THE HERALD
NEWCASTLE'S infamous coal queues could be a thing of the past if a plan to have the ships anchor over the horizon succeeds against the doubts of it ...
Sunday, 16 May 10
THREE FIRMS SHORTLISTED FOR CIL'S $ 2BN OVERSEAS PROJECTS - ECONOMIC TIMES
Economic Times reported that, State-owned Coal India Ltd (CIL) has shortlisted US firms Massey Energy and Peabody Energy, besides Indonesian Novem/S ...
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- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Aditya Birla Group - India
- Deloitte Consulting - India
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- White Energy Company Limited
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- Eastern Energy - Thailand
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