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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, 24 October 11
CAPESIZE RENTAL RATES RISE FOR THIRD DAY AS MORE SHIPS HIRED - HELLENIC SHIPPING
Rates to hire capesize vessels advanced for a third day on signs of increased demand to transport iron ore, used to make steel.Daily rates for the s ...
Sunday, 23 October 11
CHINA LOOKING TO RESELL INDONESIAN COAL CARGOES - BARCLAYS
Commodity Online reported that, Anecdotal evidence has suggested that China is even looking to resell Indonesian cargoes back into the seaborne coal ...
Saturday, 22 October 11
THE SHORT-PERIOD RATES FOR PANAMAX REMAINED FIRM - CAPT. REDDY
COALspot.com - "The market seemed to slow down a bit this week, and all sectors were down by about One to five percent", said Capt. Reddy, ...
Saturday, 22 October 11
WILL THE PROPOSED 26 PERCENT PROFIT SHARING CLAUSE IN THE MINING BILL SPEED UP THE PRODUCTION OR SCARE AWAY INVESTORS? - DIPESH DIPU
A draft law has been approved by a ministerial panel headed by Finance Minister Pranab Mukherjee of India which, if passed by the Cabinet, will make ...
Saturday, 22 October 11
INDONESIA'S GOLDEN ENERGY SLASHES ITS IPO PRICE - THE JAKARTA GLOBE
The Jakarta Globe reported that, Golden Energy Mines, a coal mining company affiliated with Sinar Mas Group, lowered its target in an initial public ...
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- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Latin American Coal - Colombia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Australian Coal Association
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Planning Commission, India
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- The University of Queensland
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
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