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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, 28 October 11
RISING COAL PRICES TO WORSEN CHINA'S WINTER POWER CRUNCH - CRI ENGLISH
CRI English reported that, the rising price of coal is fueling concerns about a power crunch set to plague China this winter, analysts said.
The ...
Thursday, 27 October 11
CAPESIZE REACHING NEW HIGHS - FEARNLEYS
Handy
Pacific market has mixed sentiments with tonnages fixed at firm levels and some tonnages in feast failing on subs.For indo-india, large eco ...
Thursday, 27 October 11
DRY BULK MARKET EDGES DOWN AS CHINAS IRON ORE DEMAND LOSES GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A plunge in Chinese iron ore demand, as a result of high steel inventories and a bleak outlook regarding steel prices, has prompted the dry bulk mar ...
Thursday, 27 October 11
BUKIT ASAM 3Q PROFIT SURGES 66.91%
Insider Stories reported that, the state-controlled coal miner PT Bukit Asam Tbk (PTBA) experienced a 66.91% increase in its net profit during a per ...
Wednesday, 26 October 11
MOODYS SEES MORE GROWTH FOR INDONESIAN COAL MINERS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s coal mining industry looks set to grow despite an uncertain global economic outlook, according to ...
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- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Anglo American - United Kingdom
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Essar Steel Hazira Ltd - India
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Cigading International Bulk Terminal - Indonesia
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Planning Commission, India
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
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