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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$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Thursday, 20 October 11
CAPESIZE - TUBARAO /QINGDAO BEING FIXED AT STRONG US$ 29.75 PMT
Handy
The Atlantic market is quite steady, and market seems to be around the same levels as last week. Fewer fixtures reported though. ...
Thursday, 20 October 11
BRACKEN INTERNATIONAL MINING LISTS ON FRANKFURT STOCK EXCHANGE
Press Release - Bracken International Mining (Code:1BM) listed on the Deutsche Börse’s Frankfurt Stock Exchange today at €1.00 with ...
Thursday, 20 October 11
CAPESIZES, SUPRAMAXES LEAD GAINS FOR DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Struggling to find additional support, but still managing to post gains, the dry bulk market has stabilized itself on higher levels again yesterday, ...
Wednesday, 19 October 11
SUPRAMAX MARKET WAS VERY FIRM LAST WEEK - BRS
With all sectors contributing positively, the BDI ended the week at 2,173 points (+8.6%), its highest level so far in 2011. The BCI stood at 3,587 ( ...
Wednesday, 19 October 11
ADARO ACQUIRES BUKIT ENIM ENERGI - INSIDER STORIES
Insider Stories reported that, Coal miner PT Adaro Energy Tbk, via its subsidiary dubbed PT Alam Tri Abadi, today revealed a 46% stake takeover of a ...
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- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Eastern Energy - Thailand
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Independent Power Producers Association of India
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- White Energy Company Limited
- The University of Queensland
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Intertek Mineral Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
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