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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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Sunday, 17 January 10
THE FUTURES FOR THREE YEARS (2010 - 2012) FIRMED UP - VISTAAR SINGAPORE
COALspot.com (Singapore): The freight market was a bit mixed with BDI up by about 159 points and closed at 3,299 points.
BDI
The cape index cont ...
Sunday, 17 January 10
NTPC TO DOUBLE CAPACITY BY 2017
NTPC, which will launch its follow-on public offer on February 3, plans to more than double its generating capacity to over 70,000 mega watts by 201 ...
Saturday, 16 January 10
HANDY CONTINUED FIRM CONDITIONS FOR MARKET IN THE ATLANTIC
HANDY
Continued firm conditions for the Handymax / Smax market in the Atlantic with the BSI having a continued upwards momentum. US$ 45,000 ac ...
Friday, 15 January 10
INDONESIA COAL - HEAVY RAINS HAVE LITTLE IMPACT ON COAL OUTPUT
Coal shipments from Indonesia's main coal-producing area are unlikely to be hit by heavy rains during January-February as many miners are prepared ...
Friday, 15 January 10
GOVT BRINGS IN DOMESTIC COAL MARKET OBLIGATION
The Energy and Mineral Resources Ministry has issued a ministerial decree requiring producers of coal and other minerals to allocate a proportion ...
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- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- SN Aboitiz Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Australian Coal Association
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
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- Bukit Asam (Persero) Tbk - Indonesia
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- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
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- Tata Chemicals Ltd - India
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- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
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