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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, 11 February 10
THE INDIAN MARKET SOFTENING A BIT - FEARNRESEARCH
Handy
The BSI has gone down for 3 weeks now but it is more a reflection of the Pac market. Activity in the Atl remains solid and rates remain firm ...
Thursday, 11 February 10
SOUTH AFRICA COAL EXPORTS DROP TO INDIA, CHINA
South African coal exports to India from Richards Bay Coal Terminal fell 39% in January from December's levels while shipments to China dropped 55% ...
Thursday, 11 February 10
JSW STEEL IS CLOSE TO ACQUIRING TWO COAL MINES IN THE US
“We are in advanced stages of negotiation and the deal will be completed in a month or two,” a company official told DNA Money on the co ...
Wednesday, 10 February 10
BHP TAKES MARUWAI SALE OFF THE TABLE, MINISTRY SAYS
Australian mining giant BHP Billiton may cancel a plan to sell a stake in its coal mining project in Maruwai, East Kalimantan, an official at the En ...
Wednesday, 10 February 10
JPMORGAN FORECASTS A 5.7% GROWTH IN SEABORNE IRON ORE SHIPMENTS, 3.8% FOR COAL AND GRAIN THIS YEAR
This year volumes of iron ore transportation by sea may grow to 5.7%, coal and grain up 3.8% over numbers in 2009, Ukrrudprom reports citing analyst ...
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- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- MS Steel International - UAE
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- PTC India Limited - India
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Deloitte Consulting - India
- Energy Link Ltd, New Zealand
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- London Commodity Brokers - England
- Central Electricity Authority - India
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
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