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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, 03 February 10
RECOVERY IN INDONESIAN MINING SECTOR EXPECTED TO BOOST SALES, UNITED TRACTORS SAYS
PT United Tractors, the country’s biggest supplier of heavy equipment, said on Tuesday that it expected sales to increase 15 percent this year ...
Tuesday, 02 February 10
THAI BANPU SAYS HIGHER COSTS TO HIT COAL PROFITS
Thailand's top coal miner, expects profits from its coal business in 2010 to be lower than last year due to higher costs, but its chief executive i ...
Monday, 01 February 10
CIL PLANS TO INVEST IN OVERSEAS COAL MINES
Over the next 10 years, CIL expects to import from these mines at least 500 million tonnes of thermal coal, a variety used by power plants
The bo ...
Sunday, 31 January 10
AUSTRALIA NEWCASTLE THERMAL COAL FALLS 0.7 PERCENT TO $ 98.53
Power-station coal prices at Australia’s Newcastle port, a benchmark for Asia, declined 0.7 percent, falling for the first time in four weeks. ...
Sunday, 31 January 10
NTPC TO IMPORT COAL
NTPC Ltd plans to import coal directly, starting next fiscal.
“We plan to import 15-16 million tonnes of coal directly from next year,&rdqu ...
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- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Ind-Barath Power Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- The University of Queensland
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Planning Commission, India
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
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