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Wednesday, 19 October 11
METALLURGICAL COAL PRICES TO DROP BELOW US$240/TONNE - WOOD MACKENZIE
 Wood Mackenzie Says Metallurgical Coal Prices to Drop Below US$240/tonne by Q4 2012 But Long-term Demand Fundamentals Remain Robust
Wood Mackenzie’s Near-Term Market Outlook cautions of falling metallurgical coal prices from now to Q4 2012, dropping from the current quarterly price of US$285/tonne for premium hard coking coal to under US$240/tonne. However, this price remains significantly above the marginal cost of production and longer-term drivers point to robust metallurgical coal demand in the Asia-Pacific market.
Prakash Sharma, Coal Market Analyst says, “Prices have started to fall from the last quarter and will continue to decline due to softening demand and the recovery of supply from flood-hit basins earlier in the year. The weakening demand is largely attributed to the global macroeconomic slowdown which appears to have accelerated through the summer in much of the developed world. Leading industrial indicators suggest a sharp deterioration in manufacturing activity – reflected by the decline in global steel production.”
Wood Mackenzie’s Senior Economist, Ed Rawle says, “The global economy has entered a period of extreme uncertainty. Wood Mackenzie’s global Gross Domestic Product growth forecast has been revised down from 3.1% to 2.8% in 2011, and 3.7% to 3.6% in 2012. But there are significant downside risks to this outlook. The Eurozone debt crisis remains unresolved and threatens to trigger a European banking crisis. Due to the sheer scale of the European banking sector, this is of major concern since it would likely lead to a global banking crisis with implications for us all.”
Despite near-term downward price movements, Wood Mackenzie says that several factors have the potential to turn this trend. Firstly, some mines have not fully recovered from the 2011 Queensland floods. The approaching wet season could lead to further delays in some mines attaining full production levels. Secondly, persistent worker-strikes at BHP Billiton Mitsubishi Alliance operated mines have the ability to tighten the market as these operations produce 26% of globally traded metallurgical coal. Lastly, US low-volatility supply has been curtailed by mine outages and changes in blending techniques following various mergers.
In the long-term , investors are still energized by the coking coal space with high margins in a current supply-constrained world. Mr. Sharma explains, ”Strong long-term demand is likely to support Mergers & Acquisitions (M&A) activity that has been ongoing since early 2008. Demand growth will be led by emerging markets with Asia accounting for 75% of global metallurgical coal demand by 2030. China and India will be key demand drivers, contributing to 60% of Asia Pacific’s total import demand.”
The growth potential of China and India can be attributed to their economic climate relative to the rest of the world. Mr. Rawle says, “The bright spot amidst the uncertainty continues to be the developing world. Specifically, we see China and much of Asia powering ahead, drawing on growth drivers that have been deliberately de-coupled from troubled developed economies over the past couple of years.”
Wood Mackenzie says that China’s reliance on coking coal imports will increase due to insufficient supply of high quality coking coal in the domestic market. China is forging ahead with plans to close all blast furnaces under 1,000 cubic metres and install new blast furnaces with capacities in excess of 2,000 cubic metres. The larger furnaces need coke produced from high-quality coking coal. As a result, a larger volume of this type of coal will be required and China will have to turn to suppliers of the likes of Australia, Mongolia and, to a lesser extent, Mozambique who are all expanding supply.
In summary, Mr. Sharma says, ”The industry should expect premium metallurgical coal prices to fall to a price below US$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Monday, 28 September 20
NEW LNG PROJECTS - ALL DRESSED UP AND NO PLACE TO GO - WOOD MACKENZIE
It was meant to be another boom year. After a record 70 mmtpa of new LNG capacity was sanctioned in 2019, at least as much capacity was lined up fo ...
Thursday, 24 September 20
SUPRAMAX: INDO TO INDIA FIXING AROUND US$13,000 - FEARNLEYS
Cape
Over the last week the iron ore segment from Brazil to China has picked up, and we see freight rates up USD 2 (12%) week on week Fearnleys ...
Thursday, 24 September 20
KOREA MIDLAND POWER TO BUY 1.92 MILLION TONS OF 4,300-4,700 NCV COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 640,000 MT 4,300-4,700 kcal/kg NCV coal per year.
...
Wednesday, 23 September 20
VIETNAM'S NEW POWER DEVELOPMENT PLAN MUST OPTIMIZE RENEWABLES AND AVOID FOSSIL FUEL LOCK-IN: IEEFA
EVN’s financial constraints leaves the utility with little room for error
Implementing Vietnam’s soon-to-be-launched next Power De ...
Wednesday, 23 September 20
MARKET INSIGHT - INTERMODAL
Undoubtedly, this year (ongoing) will never be forgotten because in a matter of months it has managed to severely affect and shape our day to day p ...
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- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Xindia Steels Limited - India
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- White Energy Company Limited
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- PTC India Limited - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Australian Coal Association
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Parliament of New Zealand
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Planning Commission, India
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- The University of Queensland
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