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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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Thursday, 13 May 10
CHINA CONCERNS TO TEST RAW MINERALS - THE AUSTRALIAN
The Australian reported that, COMMODITY prices will remain volatile and drop from recent highs as China's appetite for raw materials softens. James ...
Thursday, 13 May 10
ACTIVITY ON WEST COAST INDIA IS SLOWING - FEARNLEYS AS
DRY BULK CHARTERING
Handy
Atlantic markets remain firm but more for end May/beg June dates as there seems to be more enquiries for those dates. ...
Thursday, 13 May 10
DRY BULK SHIP OWNERS CHEERFUL AMID MARKET RALLY
China’s appetite for raw materials like iron ore and coal, as well as a series of added factors are boosting demand for dry bulk carriers, hel ...
Wednesday, 12 May 10
BANPU'S Q1 PROFIT SLIDES 43% TO B2.71BN - BANGKOK POST
The Bangkokpost reported that, Banpu Plc posted a first-quarter net profit of 2.71 billion baht, down by 43% from the same period last year.
The ...
Tuesday, 11 May 10
DALRYMPLE BAY COAL EXPORTS HIGHEST SINCE JULY; NEWCASTLE FALLS - BLOOMBERG
Bloomberg reported that, Coal shipments from Australia’s Dalrymple Bay terminal in Queensland state rose to the highest in nine months in Apri ...
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- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Petron Corporation, Philippines
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- VISA Power Limited - India
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Planning Commission, India
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
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