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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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Tuesday, 29 November 11
DRY BULK MARKET BEGINS WEEK ON HIGHER NOTE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Contrary to what had been the case during the past few weeks, this one began on a high note for the dry bulk market, with the Capesize sector pullin ...
Monday, 28 November 11
CITING CONTRACTS, MINING FIRMS ARE NOT PAYING ROYALTIES UNDER LAW - THE JAKARTA POST
The Jakarta Post reported that, when the 2009 Law on Minerals and Coal was endorsed, hopes that Indonesia could maximize its revenue from the minera ...
Monday, 28 November 11
NEW ENVIRONMENTAL MARINE REGULATIONS TO IMPACT SHIPPING IN 2012 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
August of next year will see some major changes for marine navigation. It’s when the North American ECA will come into force, introducing a 1% ...
Sunday, 27 November 11
INDIA'S KPCL TO IMPORT 50 MMT OF COAL FOR 10 YEARS
COALspot.com - Karnataka Power Corporation Limited (KPCL) will buy 5 million metric tonnes of coal annually for 10 years starting from 2015.
In a ...
Saturday, 26 November 11
INDIAN PORTS ARE BECOME COAL STOCKPILES..!!
COALspot.com - The Indian coal stocks and power tariff situation is the hot topic among the world coal producers as well as Indian coal importers.&n ...
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- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Rio Tinto Coal - Australia
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Anglo American - United Kingdom
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Sidhee Cement - India
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Posco Energy - South Korea
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- The University of Queensland
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
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