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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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Tuesday, 27 September 11
A STRONG REBOUND FOR THE CAPE MARKET - BRS
A strong rebound for the Cape market, as cargoes continued to flow into the market and tonnage remained tight in the Atlantic, according to Barry Ro ...
Tuesday, 27 September 11
INTRACO SEALS US$25.3 MIO ORDER - INSIDER STORIES
Insider Stories reported that, Heavy equipment distributor PT Intraco Penta Tbk (INTA) obtained a US$25.3 million order on hand of heavy equipments ...
Sunday, 25 September 11
THE CHARTER RATES FOR INDONESIA TO INDIA WAS FIRM - VISTAAR
COALspot.com - The freight market moved up sharply with the cape Index up by 11 pct pushing the BDI by almost 6 pct and closing at 1,920 point ...
Saturday, 24 September 11
GOVT PLANS TO RENEGOTIATE ALL CONTRACTS INCLUDING FREEPORT - JP
The Jakarta Post reported that, the Energy and Mineral Resources Ministry has confirmed plans to renegotiate all mining contracts including those wi ...
Friday, 23 September 11
ICMA TO BUILD UPGRADE FACILITIES TO ANTICIPATE BAN ON LOW-GRADE COAL EXPORT BY 2014
COALspot.com - January to August of this year, Indonesia’s coal production had already reached 235 million tons. Earlier estimates had targete ...
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- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Central Java Power - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Merrill Lynch Commodities Europe
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- White Energy Company Limited
- Anglo American - United Kingdom
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- McConnell Dowell - Australia
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
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