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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$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Sunday, 28 August 11
FREIGHT MARKET COULD BE FIRM NEXT MONTH - VISTAAR
COALspot.com - The freight market continued the upward trend first half of the week . However, towards the end of the week lost momentum and the BDI ...
Saturday, 27 August 11
JAPANESE BULK CARRIER SETS RECORD ON NORTHERN SEA ROUTE - BARENTS OBSERVER
The Northern Sea Route will see its third record in less than a month when the largest ever bulk carrier to take the route leaves Murmansk next week ...
Saturday, 27 August 11
RBCT-INDIA ROUNDS FIXED AT AROUND US$ 12K - FEARNBULK
Handy
Stable but very positional markets across all segments in the Atlantic: the gap between owners and charterers rate ideas is building up as o ...
Friday, 26 August 11
TUAH TURANGGA AGUNG ACQUIRES AN ADDITIONAL 40% SHARES IN BARA PRIMA AGUNG
COALspot.com - PT Tuah Turangga Agung, a subsidiary of PT United Tractors Tbk, has signed an acquisition agreement to acquire 40% of PT Bara Prima A ...
Friday, 26 August 11
INTRACO EYES US$200 MIO COAL TAKEOVER - INSIDER STORIES
Heavy equipment distributor PT Intraco Penta Tbk, that was founded by Halex Halim, is scouting a coal acquisition with the valuation above US$200 mi ...
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- Kideco Jaya Agung - Indonesia
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Bhatia International Limited - India
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- Minerals Council of Australia
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- AsiaOL BioFuels Corp., Philippines
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Indonesian Coal Mining Association
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Australian Commodity Traders Exchange
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Wood Mackenzie - Singapore
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
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