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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$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Saturday, 17 September 11
GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE FOR US$ 1.26 BILLION
COALspot.com - GVK group, India’s leading infrastructure developer,confirmed arrangements for the acquisition of a strategic part of large, hi ...
Saturday, 17 September 11
INDIA'S GVK ACQUIRES HANCOCK COAL AND INFRASTRUCTURE PROJECTS IN AUSTRALIA
COALspot.com - GVK group, India’s leading infrastructure developer, today confirmed arrangements for the acquisition of a strategic part of la ...
Friday, 16 September 11
DELTA DUNIA MAKMUR REMOVED 30.9 MILLION BCM OVERBURDEN IN AUGUST 2011
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 30.9 million bcm (+13.2% YoY) overburden in August 2011 while coal production was at 2.9 ...
Thursday, 15 September 11
RUSSIAN COAL EXPORTS UP 10.9% IN JAN-AUG TO 71.50 MILLION TONS - PORT NEWS / HELLENIC SHIPPING
Port News reported that, Coal exports from Russia in January-August 2011 grew by 10.9% compared with the same period last year, to 71.50 million ton ...
Thursday, 15 September 11
INDIAN GOVT PLANS TO DEVELOP 9 NEW MAJOR PORTS BY 2016 - INVEST MONEY / HELLENIC SHIPPING
The government has announced to make a investment of more than Rs 22,000 crore (approximately US$ 4,623,791,331) to develop nine new major ...
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- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- The University of Queensland
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Videocon Industries ltd - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- GMR Energy Limited - India
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- Independent Power Producers Association of India
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Manunggal Multi Energi - Indonesia
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Posco Energy - South Korea
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
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