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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, 20 September 11
MTD INAUGURATES ITS COAL TERMINAL IN JAVA ISLAND
Press Release – MTD Group of Malaysia, one of prominent key players in the development of infrastructure in Malaysia, today inaugurated their ...
Tuesday, 20 September 11
DRY BULK MARKET LOSING ITS EDGE, RETREATING AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
After a surge during the past couple of weeks, which saw Capesize earnings boosted and the BDI (Baltic Dry Index) reaching levels of year high and c ...
Monday, 19 September 11
CHINA IMPORTS MORE THAN 10 MMT INDO COAL IN AUGUST 2011
COALspot.com - Indonesian coal exports dropped 1.642 million tons in August compared to July exports. Indonesia exports 29.662 million tons of coal ...
Monday, 19 September 11
INDOMOBIL ENTERING INTO COAL MINING BUSINESS
COALspot.Com- PT Indomobil Sukses Internasional Tbk, part of, one of Indonesia's largest conglomerates, to enter into mining industry ac ...
Sunday, 18 September 11
THE COAL IMPORTS TO INDIA, OUT OF INDONESIA LIKELY TO PICK UP - CAPT. REDDY
COALspot.com - The freight market continued the upward trend until midweek almost touching 2,000 points, however towards second half of the week the ...
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- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Parliament of New Zealand
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- Australian Commodity Traders Exchange
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- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
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- Africa Commodities Group - South Africa
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- London Commodity Brokers - England
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- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
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- Metalloyd Limited - United Kingdom
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- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
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- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
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- PowerSource Philippines DevCo
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
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- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
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- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
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- PNOC Exploration Corporation - Philippines
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Directorate Of Revenue Intelligence - India
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- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- The University of Queensland
- Australian Coal Association
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- Global Coal Blending Company Limited - Australia
- Dalmia Cement Bharat India
- Karbindo Abesyapradhi - Indoneisa
- Minerals Council of Australia
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- Georgia Ports Authority, United States
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