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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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Thursday, 18 February 10
COAL MINERS FACE SHUTDOWN OVER RECLAMATION FUNDING
Three coal mining companies may be forced to temporarily stop operations this year if they fail to provide funding for a site-reclamation program.
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Thursday, 18 February 10
DECOUPLING FROM OIL PRICES ON STRONG GLOBAL ENERGY DEMAND
A recent coal market conference in Singapore focused on two main issues –— the demand for coal as a source of energy, and coal pricing.& ...
Thursday, 18 February 10
INDONESIA TO INVITE BIDS FOR $1.5 BLN COAL RAILWAY IN MAY
Indonesia plans to invite investors to bid for contracts to build a $1.5 billion coal railway line in Central Kalimantan, a planning ministry offici ...
Thursday, 18 February 10
INDONESIA ZONING RULE THREATENS MINING - INDUSTRY
Reuters reported that, confusion over a new Indonesian land use regulation could halt the operations of some mining firms, providing a new threat to ...
Wednesday, 17 February 10
LAND OVERLAPPING UNAVOIDABLE
Land overlapping issues in the mining industry is unavoidable due to the availability of mineral, coal, and oil resources which are often located be ...
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- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- ICICI Bank Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
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- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- The University of Queensland
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Planning Commission, India
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Marubeni Corporation - India
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
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