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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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Wednesday, 17 February 10
JORONG COULD COST BANPU 5%
Banpu Plc, Asean's biggest coal miner, forecasts a 5% drop in revenue if its suspended coal mine in Indonesia is closed for one year, says presiden ...
Wednesday, 17 February 10
RUSSIA KRU JAN COAL EXPORTS DOWN 4 PCT
Kuzbassrazrezugol, Russia's second largest steam coal producer, exported 1.859 million tonnes of coal last month, down 80,000 tonnes or 4 percent f ...
Wednesday, 17 February 10
VEDANTA SET FOR PORTS ENTRY WITH VIZAG TENDER
Vedanta, along with Leighton Contractors India, quoted a revenue share of 38.1% to win the 30-year contract
Mining and metals conglomerate Vedant ...
Tuesday, 16 February 10
TRENDS DRY BULK MARKET ... TRENDS - BRS
The start of the Chinese New Year had an immediate impact on rates and for once all the dry bulk segments lost similar ground.
The BDI fell 5%, a ...
Tuesday, 16 February 10
LAW POSES THREAT TO INDONESIA'S COAL INDUSTRY
A zoning law could cost coal miners billions of dollars this year alone, hurt investment in the industry and disrupt the supply of the fuel to the c ...
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- San Jose City I Power Corp, Philippines
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Romanian Commodities Exchange
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- Renaissance Capital - South Africa
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- White Energy Company Limited
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- The University of Queensland
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Parliament of New Zealand
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