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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, 23 September 11
UT TO PRODUCE 7 MMT OF COAL BY 2012
PT United Tractors Tbk is targeting a 7 million tons of coal production next year, a 55.55% increase from 4.5 millions targeted this year, said Pres ...
Friday, 23 September 11
RECORD RECYCLING ACTIVITY STIRS OPTIMISM IN DRY BULK SAYS BIMCOS ANALYSIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As expected at the start of the year, dry bulk ship owners were expected to flock scrapyards around the world, in order to take advantage of attract ...
Friday, 23 September 11
PANAMAX EXPERIENCED A SOFTENING IN RATES - FEARNLEYS AS
Handy
Still a good boost of fresh cargoes entering the market. Vessels in Black Sea with GOA clearance and Baltic positions are fetching tick abov ...
Wednesday, 21 September 11
INDIA'S COAL IMPORTS FROM INDONESIA FALL, CHINA BUYS MORE
COALspot.com - Indian coal imports from Indonesia fall to below 6 million tons in August, and this fall was continuing last few months. Ho ...
Wednesday, 21 September 11
2ND ANNUAL SHALE GAS SUMMIT
2nd Annual Shale Gas Summit 31 October – 3 November 2011 JW Marriott Hotel, Hong Kong
According to a recent EI ...
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- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- White Energy Company Limited
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- SMG Consultants - Indonesia
- Planning Commission, India
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Deloitte Consulting - India
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Miang Besar Coal Terminal - Indonesia
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- The University of Queensland
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Commonwealth Bank - Australia
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Edison Trading Spa - Italy
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- ASAPP Information Group - India
- Jorong Barutama Greston.PT - Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
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