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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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Sunday, 09 October 11
FREIGHT MARKET ENDED WITH A POSITIVE DIRECTION - VISTAAR
COALspot.com - The market ended with a positive note with all the segments up except for handy size. The biggest gainer was Panamax index up by 11 p ...
Saturday, 08 October 11
INDONESIAN MINER PLANS $167M IPO TO FUEL SUMATRA COAL BOOM - JG
The Jakarta Globe reported that, coal miner Atlas Resources aims to raise as much as Rp 1.5 trillion ($167 million) in an initial public offering to ...
Friday, 07 October 11
MINING REGULATIONS , OBSTACLES AND GROWTH : INDIA VS INDONESIA - SUNIL K KUMBHAT
COALspot.com - The Govt of India has passed long pending Mines & Minerals (Regulation and Development) Bill, 2011, which seeks to replace ...
Friday, 07 October 11
$100M FOR EXPANSION INTO KALIMANTAN MINING: AKR
The Jakarta Globe, one of the leading English news paper in Indonesia reported that, AKR Corporindo, a fuel and chemical distributor, has set aside ...
Thursday, 06 October 11
REALM SECURES 51% OF KATINGAN RIA COAL PROJECT IN CENTRAL KALIMANTAN
•Realm secures 51% of PT Katingan Ria Thermal Coal Project in Central Kalimantan
•Realm takes ownership of Kalres Limited
•Acquisit ...
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- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Minerals Council of Australia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Deloitte Consulting - India
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Australian Coal Association
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Indian Energy Exchange, India
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Commonwealth Bank - Australia
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
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