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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, 15 March 10
CIL BOARD CLEARS 10 PROPOSALS FOR STRATEGIC PARTNERSHIP OR JVS
Economic Times reported that, Towards achieving a global footprint, state-owned Coal India (CIL) is eyeing strategic partnership or joint ventures w ...
Sunday, 14 March 10
CHINESE COAL PRICE MAY RISE TO TRADE NEAR SPOT, MACQUARIE SAYS
Bloomberg reported that, Steel mills in China, the world’s biggest producer of the alloy, may pay more for domestic coking coal this year as d ...
Sunday, 14 March 10
THERE IS NO INDICATION OF SLOWING DOWN OF IRON ORE AND COAL IMPORTS BY CHINA - VISTAAR SINGAPORE
COALspot.com: The dry bulk freight market continued the upward trend and the BDI closed 8.14 pct this week.
The Cape index up by 10.32 pct ...
Saturday, 13 March 10
INDONESIA COAL EXPORTS DROP IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, exported 24.38 million tons in January 2010 which fell slightly to 22.89 mln ton of coal i ...
Saturday, 13 March 10
INDONESIA TELLS BUKIT ASAM TO DITCH PARTNER IN SUMATRA RAILWAY UNLESS PROJECT STARTS
The Jakarta Globe reported that, the Indonesian government has urged state-owned miner PT Tambang Batubara Bukit Asam to look for new partners to he ...
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- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Port Waratah Coal Services - Australia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Planning Commission, India
- Orica Australia Pty. Ltd.
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Toyota Tsusho Corporation, Japan
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Parliament of New Zealand
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Electricity Generating Authority of Thailand
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
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