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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, 26 November 11
THE FREIGHT MARKETS EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - The market were down probably with the sentiments of global financial markets and all segments were down.
The BDI was up down by 4 ...
Friday, 25 November 11
DISPUTE BETWEEN GIANT MINING FIRMS ENDS IN LAHAT - THE JAKARTA POST
The Jakarta Post reported that, prolonged dispute taking place in the South Sumatra regency of Lahat and involving two giant mining companies PT Buk ...
Friday, 25 November 11
DRY BULK MARKET LOSING STEAM, FAST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s been a week of falls for the dry bulk market this one, leaving ship owners with a sour taste in their mouths, as evidence of a recovery i ...
Thursday, 24 November 11
INDONESIA/INDIA SPMX TC AROUND $ 7/8K AND AROUND $ 12/13.00 PMTS ON VOYAGE BASIS - FEARNLEYS
Handy
Last week ended on a positive note in the Atlantic however the activity levels are somewhat reduced. Owners are asking in excess of USD ...
Thursday, 24 November 11
DRY BULK MARKET KEEPS LOSING STEAM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was lower once again on Wednesday, with the industry’s benchmark, the Baltic Dry Index (BDI) ending the session down by 1. ...
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- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Parliament of New Zealand
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Merrill Lynch Commodities Europe
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- AsiaOL BioFuels Corp., Philippines
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Economic Council, Georgia
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- The University of Queensland
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Riau Bara Harum - Indonesia
- Mintek Dendrill Indonesia
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
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