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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, 19 April 10
PLN TO OPERATE COAL MINES IN BID TO FUEL POWER PLANTS
The Jakarta Globe reported that, state electricity utility PT Perusahaan Listrik Negara said on Sunday that it aimed to take over operation of small ...
Sunday, 18 April 10
GOVT FORMS PANEL FOR RS 12,000-CR (US$ 2.711 BILLION) COAL INDIA IPO - ECONOMIC TIMES
Economic Times reported that, the government has formed an inter-ministerial panel to carry forward the proposed Rs 12,000-crore (US$ 2.711 billion) ...
Sunday, 18 April 10
THE FUTURES FOR THREE YEARS (2010-2012) FOR PANAMAX WAS AT AROUND US$ 21500 PER DAY - VISTAAR
COALspot.com: The BDI indices up by 3.30 pct and overall market continued to be firm except for India to Fareast.
“The cape index for the f ...
Saturday, 17 April 10
DRY BULK SHIPPING MARKET ANALYSIS - BIMCO
Strong Chinese steel market is set to cushion the flood of new Capesize vessels entering the dry bulk fleet Demand: The first quarter of 2010 saw up ...
Saturday, 17 April 10
DRY BULK MARKET EDGES HIGHER ON STRONGER DEMAND
The dry bulk market managed to inch higher by the end of the week as brokers indicated that stronger cargo demand pushed freight rates that much hig ...
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- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Planning Commission, India
- Anglo American - United Kingdom
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Parliament of New Zealand
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- White Energy Company Limited
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