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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$240/tonne from now until Q4 2012. Although further downside price risks remain given ongoing macroeconomic uncertainty and new sources of supply entering the market place, the constant threat of additional unpredictable mine outages and the upcoming rainy season in key supply basins should keep them from falling too far. Long-term demand also remains strong in emerging markets.”
Editor’s notes:
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com. Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Tuesday, 22 November 11
NTPC TO BUY 2 MMT OF IMPORTED COAL FOR ITS FOUR PLANTS
COALspot.com - NTPC Limited, incorporated in 1975 as a public sector company wholly owned by Government of India, the largest thermal power generati ...
Tuesday, 22 November 11
ABM INVESTAMA SETS IPO AT RP 3,750
Insider Stories reported that, Integrated energy company PT ABM Investama Tbk has determined the IPO price at Rp3,750 (approximately US$ 0.415) per ...
Tuesday, 22 November 11
A SURPRISINGLY STRONG WEEK FOR THE CAPES - BRS
Positive gains for most of the segments this week, the exception being the Handysizes. Overall the BDI ended the week at 1,895 points (+3.3% week-on ...
Tuesday, 22 November 11
APPETITE FOR DRY BULK VESSELS SLOWS DOWN AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was down at the beginning of the week, as demand for Capesize vessels was particularly low. The industry’s benchmark, the ...
Monday, 21 November 11
CAPESIZES DRIVE MARKET LOWER, ANALYSTS DIVIDED ON DRY BULK OUTLOOK IN THE LONG RUN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market ended the week on a sour note, with the industry’s benchmark heading downwards to 1,895 points, which represented a slight ...
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- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Malabar Cements Ltd - India
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Australian Coal Association
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- The University of Queensland
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Jindal Steel & Power Ltd - India
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
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