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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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Friday, 31 July 20
BOTSWANA PLANS MORE COAL-FIRED POWER AS AFRICAN SOLAR ACCELERATES - IEEFA
An African economic leader like Botswana should embrace solar to reduce subsidies and tariff hikes
As Sub-Saharan solar ambition has ...
Wednesday, 29 July 20
2019 U.S. COAL PRODUCTION FALLS TO ITS LOWEST LEVEL SINCE 1978 - EIA
In 2019, U.S. coal production totaled 706 million short tons (MMst), a 7% decrease from the 756 MMst mined in 2018. Last year’s production wa ...
Wednesday, 29 July 20
MARKET INSIGHT - INTERMODAL
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Tuesday, 28 July 20
DEUTSCHE BANK TO END GLOBAL BUSINESS ACTIVITIES IN COAL MINING BY 2025 - REUTERS
Deutsche Bank, in a revamp of its policies for fossil fuels, said on Monday that it would end business activities worldwide related to coal mining ...
Monday, 27 July 20
IEEFA ENERGY FINANCE CONFERENCE 2020: COAL, LNG, PETROCHEMICAL SECTORS FACE POOR OUTLOOK AND UPHILL BATTLE FOR INVESTORS
Fossil fuel industries were becoming less financially attractive even before the global coronavirus pandemic
Three major fossil fuel ...
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- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Petron Corporation, Philippines
- Australian Coal Association
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- PTC India Limited - India
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
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