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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, 20 March 10
NO MAJOR CHANGES ON SUPRAMAX MARKET FOR NEXT COUPLE OF WEEKS - VISTAAR
COALspot.com: “The dry bulk freight market continued to be firm on the Panamax and Supramax and Handy size vessels”, said Capt. Reddy MD ...
Friday, 19 March 10
COAL INDIA TO HIT CAPITAL MARKETS IN JULY
India’s largest coal producer, Coal India Ltd (CIL), expects to hit the capital markets by July, company chairman Partha S. Bhattacharyya said ...
Thursday, 18 March 10
COAL IMPORTS SOAR IN NANTONG PORT OF JIANGSU PROVINCE CHINA
BloombergUTV reported that, Coal imports at Nantong Port, located in coastal China's Jiangsu Province, soared 13 times to 581,000 tonnes in the fir ...
Thursday, 18 March 10
INNER MONGOLIA TO CAP COAL OUTPUT AT 700 MLN TONS IN 2010
Alibaba / China Knowledge reported that, Inner Mongolia, China's northern border autonomous region, plans to control coal output at 700 million ton ...
Thursday, 18 March 10
THE INDIAN MARKET WAS QUIET, BUT BECAUSE OF THE TIGHT TONNAGE SITUATION STILL FIRM - FEARNLEYS AS
Handy
Activity continues to be solid in the Atlantic.
Supramax physical market is strong which pushed the BSI to a 17 month high at ...
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- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Thai Mozambique Logistica
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Central Electricity Authority - India
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Krishnapatnam Port Company Ltd. - India
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Bukit Baiduri Energy - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
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