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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$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Friday, 30 September 11
INDIAN IRON ORE MARKET GETTING ACTIVE - FEARNLEYS AS
Handy
The Atlantic market continued its strong trend with fresh cargoes entering the market. Vessels open US Gulf fixed tick above US$ 27k back to t ...
Friday, 30 September 11
KRISHNAPATNAM PORT WINS GLOBAL PORT & COAL PORT OF THE YEAR AWARDS
COALspot.com - Krishnapatnam Port, a dynamic new generation world class port located in the East Coast of India has been adjudged the winner in the ...
Thursday, 29 September 11
INDONESIA'S MINERS FACE AN UNCERTAIN FUTURE - RUPERT WALKER
An evolving regulatory framework for the country's minerals industry could threaten its profitability and stifle investment.
The five-year surge ...
Thursday, 29 September 11
DRY BULK MARKET FALLS MID-WEEK, FURTHER DROP EXPECTED NEXT WEEK ON CHINA HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market, as reflected by the Baltic Dry Index (BDI) retreated by 0.36% yesterday reaching 1,920 points, with the Capesize segment suffer ...
Wednesday, 28 September 11
ATLAS RESOURCES TO SELL 25% STAKE IN IPO - INSIDER STORIES
Insider Stories reported that, coal producer PT Atlas Resources Tbk, that is controlled by Indonesian businessman Andre Abdi, plans to sell 783.33 m ...
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- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Bhatia International Limited - India
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- White Energy Company Limited
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- The University of Queensland
- PTC India Limited - India
- Latin American Coal - Colombia
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Global Coal Blending Company Limited - Australia
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