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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$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Thursday, 25 August 11
OPG EXPECTS COAL PRICES TO REMAIN FIRM IN THE SHORT TERM
COALspot.com - Revenue of OPG, the developer and operator of Group Captive power plants in India up 188% to £33.15m and Income from continuing ...
Thursday, 25 August 11
PAITON POWER LOOKING FOR 3.96 MILLION TONS OF COAL
COALspot.com - PT Pembangkit Jawa Bali (PJB) is looking for 3.96 million tons coal with calorific value 4,800 kcal/kg on as received basis. Accordin ...
Tuesday, 23 August 11
ICMA CALLS GOVERNMENT TO REVIEW EXPORT BAN REGULATION
COALspot.com - Chairman of the Indonesian Coal Mining Association (ICMA) Bob Kamandanu asks the government to review the regulation that being draft ...
Tuesday, 23 August 11
ADARO ENERGY ACQUIRES 75% STAKE OF PT MUSTIKA INDAH PERMAI FOR US$ 222.5 MILLION
COALspot.com - PT Alam Tri Abadi, a wholly owned subsidiary of PT Adaro Energy Tbk, signed a share purchase agreement to acquire a 75% stake of PT M ...
Tuesday, 23 August 11
COAL DEMAND IS REMAINED STRONG IN SPITE OF CURRENT GLOBAL ECONOMIC UNCERTAINTY - BUMI
COALspot.com - Indonesia's largest coal producer, PT Bumi Resources, Tbk (BUMI)'s sales revenue has increased to US$1.79 billion (compared with US ...
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- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
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