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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, 04 May 10
APRIL 2010 COAL PRICE REFERENCE WAS US$ 86.58/T FOB VESSEL
COALspot.com: The directorate general of mineral, coal and geothermal of Indonesia has publishing a monthly coal price reference (HBA) to be used by ...
Tuesday, 04 May 10
DRY BULK MARKET SOFTENING AGAIN ON LACK OF DIRECTION
The dry bulk market has put on the brakes once again, after the last session of the Baltic Dry Index ended at 3,354 points, down 5 from the previous ...
Monday, 03 May 10
AUSTRALIA PLANS 40 PERCENT TAX ON MINING PROFITS - THE JAKARTA POST
The Jakarta Post reported that, Australia would heavily tax the booming profits of its mining companies under a tax system overhaul proposed Sunday ...
Saturday, 01 May 10
THE PERIOD ACTIVITY WAS QUITE FIRM DURING THE WEEK - CAPT. REDDY
COALspot.com: The BDI was up by 11.32 pct which was mainly due to the firmness in capsize index which was up by 21.55 pct .
The other sectors Pan ...
Saturday, 01 May 10
EXPANDED SA COAL TERMINAL TO START OPERATIONS ON MAY 1 - MINING WEEKLY
Mining Weekly reported that, In line with expectations, the Richards Bay Coal Terminal (RBCT) had completed the R1,2-billion Phase V expansion ...
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- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Lanco Infratech Ltd - India
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- White Energy Company Limited
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Renaissance Capital - South Africa
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Ministry of Mines - Canada
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