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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, 04 January 10
TOKYO ELECTRIC SEALS XSTRATA COAL DEAL
Tokyo Electric Power Co has agreed to pay about $US85 a tonne for Australian thermal coal in 2010 from miner Xstrata, a source familiar with the pri ...
Monday, 04 January 10
IND-BARATH TO SHIFT PROJECT FROM AP TO TN
Hyderabad-based power producer Ind–Barath is planning to set up a power plant at Tuticorin, Tamil Nadu. The proposed project would attract inv ...
Sunday, 03 January 10
NEWCASTLE THERMAL COAL PRICES FALL IN FIRST DECLINE IN 3 WEEKS
Power-station coal prices at Australia’s Newcastle port, a benchmark for Asia, declined 1.5 percent, falling for the first time in three weeks ...
Sunday, 03 January 10
NTPC SEEKS REPORT ON TRANSPORTING COAL THROUGH WATERWAYS
State-run National Thermal Power Corporation (NTPC), the country’s largest power utility, has asked for a “holistic” feasibility r ...
Sunday, 03 January 10
BHP TO STAY IN MARUWAI AND TO KEEP 75 PERCENT OF THE STAKE
Despite recent statements that it would pull out completely from Indonesia, the world's largest mining company BHP Billiton has now admitted that i ...
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- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- Mercuria Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- OPG Power Generation Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Australian Coal Association
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- The University of Queensland
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Deloitte Consulting - India
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Krishnapatnam Port Company Ltd. - India
- Electricity Generating Authority of Thailand
- Planning Commission, India
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