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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, 09 September 11
SUPRA BARA SECURES $20 MILLION LOAN - JP
The Jakarta Post reported that, Coal miner PT Supra Bara Energi says it has secured a US$20 million loan facility from BNP Paribas to buy heavy equi ...
Friday, 09 September 11
CAPESIZE CAN SECURE USD 17-18K SHORT PERIOD - FEARNBULK
Handy
The US Gulf has remained relatively steady, slightly more activity in the South Atlantic with owners aiming for low to mid USD 20k´s f ...
Thursday, 08 September 11
UKRAINES COAL PRODUCTION TO RISE 8% - IFANDP
Industrial fuels & power reported that, Ukraine will increase its coal output by about 8% this year compared to last year, said the country&rsqu ...
Thursday, 08 September 11
DRY BULK MARKETS RALLY COMES TO AN END - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
As was widely expected by analysts and shipbrokers alike, the latest rally of the dry bulk market came to a halt yesterday, with the Baltic Dry Inde ...
Thursday, 08 September 11
TRADA MARITIME BUYS GUNUNG BARA UTAMA
Insider Stories reported that, PT Trada Maritime Tbk (TRAM) has purchased convertible bonds issued by PT Awesome Coal from Zakia Limited. The memora ...
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- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Australian Coal Association
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
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