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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, 25 January 10
MINING GROUPS MAY SEEK JUDICIAL REVIEW OF 2009 LAW
Indonesia’s mining associations said on Wednesday that they planned to seek a judicial review of the 2009 Mining Law this year if they are una ...
Monday, 25 January 10
INDONESIAN GOVERNMENT TO ISSUE REGULATION FOR IMPLEMENTATION OF MINERAL AND COAL MINING BUSINESS ACTIVITIES LAW NO.4 / 2009 SOON
COALspot.com (Indonesia): The government regulation concerning implementation of mineral and coal mining business activities Law no.4 / 2009 is expe ...
Monday, 25 January 10
DUQM IWPP'S COAL REQUIREMENTS PROJECTED AT 3MT PER YEAR
Oman's first coal-fired Independent Water and Power Project (IWPP) planned at Duqm is envisaged to have a feedstock requirement of around 3 million ...
Monday, 25 January 10
THE FUTURES FOR CAPE, PANAMAX AND SUPRAMAX FOR THREE YEARS (2010 - 2012) WAS AT AROUND US$ 32,000, US$ 20,000 AND US$ 17,000 PER DAY RESPECTIVELY
COALspot.com ( Singapore): The freight market remained flat this week the market slight soft.
BDI INDEX
The BDI was down by 95 points and closed ...
Saturday, 23 January 10
COAL CAMARADERIE
Union coal minister Shriprakash Jaiswal feels Asian countries should join hands in developing minerals, particularly coal.
At the third Asian Min ...
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- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- The University of Queensland
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Siam City Cement - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Rio Tinto Coal - Australia
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
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