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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, 15 July 20
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Monday, 13 July 20
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- Posco Energy - South Korea
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- PowerSource Philippines DevCo
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Deloitte Consulting - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- The Treasury - Australian Government
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Latin American Coal - Colombia
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- The University of Queensland
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Asmin Koalindo Tuhup - Indonesia
- SN Aboitiz Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- Independent Power Producers Association of India
- Australian Coal Association
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
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