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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, 03 September 11
TNPL TO BUY 240K MT OF NON-COKING COAL
COALspot.com - Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure 240,000 MT +/- 5 percent of non-coking imported coal with ...
Friday, 02 September 11
CAPESIZE DEMAND LIFTS DRY BULK MARKET ONCE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In what proves to be the best week of the year for Capesize owners, strong demand has helped propel the dry bulk market to new highs yesterday. The ...
Thursday, 01 September 11
EWP TO BUY 195KT OF VIETNAM COAL
COALspot.com - Korea Midland Power (KOMIPO) has issued an International open bidding for 490kt of sub bituminous coal, according to a bid invitation ...
Thursday, 01 September 11
DRY BULK MARKET TAKES GREAT LEAP FORWARD - NIKOS ROUSSANOGLOU
In what turned out to be a rather hopeful ending of the month, the last day of August saw the dry bulk market’s benchmark, the BDI (Baltic Dry ...
Tuesday, 30 August 11
FAUJI CEMENT CONSUMED MORE THAN 1 MILLION TONS OF LOCAL COAL
Cooper Minerals Inc.based in Vancouver, BC, Canada, is a junior exploration company engaged in the acquisition, exploration and development of miner ...
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Australian Coal Association
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
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