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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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Saturday, 27 March 10
CHINA TO REMAIN NET COAL IMPORTER IN NEAR FUTURE - STEEL GURU
Xinhua News cited Mr Wu Chenghou a councilor with the China Coal Transportation and Marketing Association as saying that China will remain a net coa ...
Friday, 26 March 10
CHINA PLANS TO INCREASES IMPORT COAL GREATLY IN 2010
– Asia Pacific Coal Trading & Investment Outlook 2010-
COALspot.com (Press Release): China plans to increase coal import significantly ...
Friday, 26 March 10
NTPC IN TALKS FOR INDONESIAN MINE - LIVE MINT
The deal for the coal mine with 1.8 bn tonnes of reserves may be valued at $1 bn
Live Mint reported that, State-run power utility NTPC Ltd is in ta ...
Friday, 26 March 10
ESSAR GROUP SIGNS DEAL FOR INDONESIAN COAL MINE - BUSINESS LINE
Looking ahead
The coal from the Indonesian mine would provide raw material to the group's power projects
The Aries coal mines acquired by the gro ...
Thursday, 25 March 10
CHINA RAILWAY WINS $4.8 BILLION INDONESIA PROJECT - BLOOMBERG
Bloomberg reported that, China Railway Group Ltd. won a $4.8 billion order from PT Bukit Asam, Indonesia’s state-owned coal producer, for a co ...
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- PTC India Limited - India
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- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
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- Metalloyd Limited - United Kingdom
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- SMG Consultants - Indonesia
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- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Australian Coal Association
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- White Energy Company Limited
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
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- Orica Mining Services - Indonesia
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- Planning Commission, India
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- Tamil Nadu electricity Board
- Minerals Council of Australia
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- The Treasury - Australian Government
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- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
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- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Commonwealth Bank - Australia
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- Ministry of Transport, Egypt
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- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
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- Sarangani Energy Corporation, Philippines
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- Independent Power Producers Association of India
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- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Energy Link Ltd, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
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- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
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- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Mercuria Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Edison Trading Spa - Italy
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Parliament of New Zealand
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
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