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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, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
Monday, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
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- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Binh Thuan Hamico - Vietnam
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Neyveli Lignite Corporation Ltd, - India
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- Commonwealth Bank - Australia
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- White Energy Company Limited
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coastal Gujarat Power Limited - India
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- ASAPP Information Group - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Ministry of Finance - Indonesia
- Australian Coal Association
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Lanco Infratech Ltd - India
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- The University of Queensland
- Independent Power Producers Association of India
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Chettinad Cement Corporation Ltd - India
- Bhatia International Limited - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
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