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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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Thursday, 03 November 11
DRY BULK MARKET OFFICIALLY IN THE RED ON LOWER CARGO DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market kept falling yesterday, on lower iron ore demand, which has caused the industry’s benchmark, the BDI (Baltic Dry Index) to ...
Wednesday, 02 November 11
MMTC TO BUY 3.73 MILLION TONS OF COAL FOR 2011- 2013
COALspot.com - India’s state-owned coal and mineral trader MMTC looking for 3.73 million tons of power plant coal for the period 2011 - 2012/ ...
Wednesday, 02 November 11
PANAMAX MARKET BECAME QUIETER AFTER THE RECENT RECOVERY - BRS
There were substantial losses across the board this week: the BDI lost 6.3% to end at 2,018 and the BCI 8.2% to end 3,274. In the smaller sizes the ...
Tuesday, 01 November 11
BORNEO LUMBUNG BUYS 23.8% INTEREST IN BUMI
COALspot.com - PT. Borneo Lumbung Energi (BORN), an Indonesian coking coal producer announces that it has signed a sale and purchase agreement, cond ...
Tuesday, 01 November 11
BAKRIE FORMS STRATEGIC PARTNERSHIP WITH BORNEO - REDUCING DEBT BY USD 1 BILLION
Press Release - Enhancing the standing of “Indonesia Inc.” at the London Stock Exchange PT Bakrie & Brothers Tbk (“BNBR” ...
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- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Minerals Council of Australia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Ministry of Mines - Canada
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- White Energy Company Limited
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- London Commodity Brokers - England
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- The University of Queensland
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
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