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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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Sunday, 16 May 10
INDIKA ENERGY & COAL ASSETS EXPANSION
Insider stories reported that, PT Indika Energy Tbk (INDY) has three portfolio coal assets, PT Kideco Jaya Agung, coal asset in East Kalimanta ...
Saturday, 15 May 10
THE AVERAGE CHARTER HIRE FOR CAPE REACHES US$ 49,931 PER DAY - VISTAAR SINGAPORE
COALspot.com: "The freight market was extremely buoyant this week with BDI almost up by 9 pct and the market was very firm in Feast/SE Asia sec ...
Saturday, 15 May 10
DRY BULK MARKET POSTS HEALTHY WEEKLY GAINS
The dry bulk market has reached new highs this week, the second consecutive solid one, with the industry’s benchmark, the Baltic Dry Index (BD ...
Friday, 14 May 10
JSW BUYS COAL MINES IN US, PRODUCTION STARTS IN SEPT
JSW Steel on Friday said it has completed $100 million acquisition of coking coal assets in the US and will start production from September to parti ...
Friday, 14 May 10
KANGAROO RESOURCES TO ACQUIRE INDONESIAN COAL PROJECTS - PROACTIVE INVESTORS
Proactive Investors reported that, Kangaroo Resources (ASX: KRL) is preparing to complete the acquisition of its five outstanding Indonesian coal pr ...
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- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Posco Energy - South Korea
- Edison Trading Spa - Italy
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- The University of Queensland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- McConnell Dowell - Australia
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
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