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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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Wednesday, 05 August 20
SLUMP IN OIL REVENUE CHALLENGES MIDDLE EAST OIL EXPORTERS - INTERMODAL
The Covid-19 pandemic has had far-reaching consequences on the global capital markets. Despite the US government’s efforts for a quick and de ...
Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
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Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
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- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Parliament of New Zealand
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- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Ministry of Transport, Egypt
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- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Rio Tinto Coal - Australia
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- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
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- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
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- White Energy Company Limited
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- Ministry of Mines - Canada
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- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
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- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
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- Sojitz Corporation - Japan
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- Electricity Authority, New Zealand
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- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Semirara Mining Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Neyveli Lignite Corporation Ltd, - India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Planning Commission, India
- Ministry of Finance - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Australian Coal Association
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
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