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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, 08 March 10
CHINA SHIPPING TO CARRY MORE COAL FOR SHENHUA
Hellenic Shipping News reported that, China Shipping (Group) Company will expect to ship 40 million tons of coal for Shenhua Group in 2010, Li Shaod ...
Sunday, 07 March 10
SHIPS WERE FIXED AT AROUND US$ 16,000 PER DAY FOR TRIP VIA INDONESIA TO INDIA - CAPT. REDDY
COALspot.com: The freight market was quite buoyant this week and BDI was up by 18 pct . The Cape index up by 23.60 pct and Panamax index was up by 1 ...
Saturday, 06 March 10
ESSAR TO BUY US COAL FIRM FOR $550-600 MN
Business-Standard reported that, the Essar Group is close to buying Trinity Coal, one of the top 10 coal producers in the US, in a deal worth $550-6 ...
Friday, 05 March 10
KARNATAKA POWER SEEKS 900,000 TONS STEAMING COAL OVER 9 MONTHS
Bloomberg reported that, Karnataka Power Corp., an Indian electricity generator, is seeking to import 900,000 metric tons of steaming coal over nine ...
Thursday, 04 March 10
BANPU KEEPS JORONG OUTPUT AT 2M TONNES
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is maintaining an output target of 2 million tonnes this year from its Jorong mi ...
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- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Planning Commission, India
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- VISA Power Limited - India
- India Bulls Power Limited - India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- White Energy Company Limited
- PTC India Limited - India
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
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