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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, 20 November 11
THE FREIGHT MARKETS EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The market continued to move up with all sectors gaining except for handy size.
The BDI was up by 3.26 pct and closed at 1895 poin ...
Friday, 18 November 11
MMTC SEEKS 1.365 MMT OF IMPORTED COAL
COALspot.com - India's MMTC, the largest trading company of India and a major trading company of Asia, has issued a term supply tender for 1.365Mt ...
Friday, 18 November 11
KPC, ARUTMIN OUTPUT REACHED 47.1 MIO TONS - INSIDER STORIES
PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia, reported 47.1 million tons of coal production in 9M 2011, according to Indiser Stories.
Insi ...
Friday, 18 November 11
THE ATLANTIC SUPRAMAX MARKET EXPERIENCED A STEADY AND FIRM TENDENCY
Handy
The Atlantic Supramax market experienced a steady and firm tendency this week. Especially the North Atlantic and Mediterranean position ...
Friday, 18 November 11
BERAU COAL 9M PROFIT SOARS 194.46% - INSIDER STORIES
Insider Stories reported that, PT Berau Coal Energy Tbk (BRAU), which is 84.7% owned by Bumi Plc, reported a 194.46% jump in net profit by end of Se ...
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- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Pendopo Energi Batubara - Indonesia
- Indian Oil Corporation Limited
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Medco Energi Mining Internasional
- Australian Coal Association
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- PTC India Limited - India
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- The University of Queensland
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- Simpson Spence & Young - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- India Bulls Power Limited - India
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karaikal Port Pvt Ltd - India
- White Energy Company Limited
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
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