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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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Tuesday, 29 December 09
PROFIT IN COAL INDUSTRY DOWN 9.4% Y-O-Y IN JAN.- NOV.
In November, China's coal production was 289mln tons, up 26.3% year on year, an increase of 5.2% over last month. China's average daily trucks loa ...
Tuesday, 29 December 09
DHARMA HENWA EYES 20% REVENUE GROWTH
Local integrated mining services provider PT Dharma Henwa, which was earlier this year acquired by coal mining giant PT Bumi Resources, expects reve ...
Monday, 28 December 09
NEED TO IMPORT COAL COMES EARLY
Viet Nam may need to start importing coal as early as 2012, three years earlier than expected, to meet its electricity demands.
The Viet Nam Coal ...
Monday, 28 December 09
GOVT EYES $3.57B MINING, GEOTHERMAL INVESTMENT
The country can expect up to US$3.57 billion in investment in mining and geothermal energy next year, which would represent an increase by more than ...
Monday, 28 December 09
INDONESIAN MINER LINKED TO FUGITIVE FINANCIER
The Energy Ministry is unlikely to approve the transfer of ownership of coal miner PT Riau Baraharum on allegations it is indirectly owned by fugiti ...
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- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- GAC Shipping (India) Pvt Ltd
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Deloitte Consulting - India
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Planning Commission, India
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Sojitz Corporation - Japan
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Siam City Cement - Thailand
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Price Waterhouse Coopers - Russia
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