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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, 01 March 10
166 MINING COMPANIES THREATEN ENVIRONMENT
Viva News reported that, the Indonesian Forum for the Environment (Walhi) of East Kalimantan reveals that 166 coal mining companies, which are curre ...
Monday, 01 March 10
IRON ORE PRICE NEGOTIATIONS - 80PCT HIKE SEEN BY CHINESE
China Knowledge quoted an insider from a large Chinese steel company said there will be a significant increase in steel prices in the next few month ...
Sunday, 28 February 10
SUPRAMAX CHARTER RATES FOR ONE YEAR IS AROUND US$ 19,000/20,000 PER DAY - VISTAAR SINGAPORE
COALspot.com : The freight market firmed up by almost 10 pct on Supramax and Handy size and about 7 pct on Panamax.
However it was interesting to ...
Sunday, 28 February 10
MINISTRY SEEKS TWO YEAR DELAY TO IMPLEMENT ENVIRONMENT LAW
The Jakarta Post reported that, The ministry of energy and mineral resources has proposed that the government postpone the implementation of the 200 ...
Sunday, 28 February 10
CONTINENTAL TARGETS COAL SALES FROM S AFRICA MINE IN Q2 - MINING WEEKLY
Mining weekly reported that, Junior coal explorer Continental Coal would start coal sales from its Vlakvarkfontein mine, in South Africa, in the sec ...
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- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
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- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Australian Coal Association
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- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Aditya Birla Group - India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
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- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Antam Resourcindo - Indonesia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- Carbofer General Trading SA - India
- Bhushan Steel Limited - India
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Electricity Authority, New Zealand
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