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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, 17 November 11
DRY BULK MARKET INCHES FORWARD AND INTO HIGHER GROUND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market edged higher yesterday, on the back of stronger demand for Capesize vessels and general improvement of sentiment on most of the ...
Thursday, 17 November 11
KOMIPO INVITES BIDS FOR 500K MT OF COAL
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids for the supply of 500,000 Metric Tons of minimum 5700 kcal/kg coal of NAR bases ...
Thursday, 17 November 11
INDONESIAN GOVERNMENT PLANS TO ISSUE MORATORIUM ON COAL MINING LICENSE
COALspot.com - Energy and mineral resources ministry is plans to issue a moratorium on the issuance of coal mining licenses, after the anti-graft co ...
Wednesday, 16 November 11
KRISHNAPATNAM PORT BECOMES DEEPEST DRAFT PORT IN INDIA
COALspot.com - Krishnapatnam Port in its quest to be the best port in India has increased its draft to 17.5 meters, according to E-Mail statement fr ...
Wednesday, 16 November 11
CHINA'S INDONESIA COAL IMPORTS RISE IN OCTOBER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31,162,688 MT of coal in October 2011.
China was a largest importer of Indonesi ...
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- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Trasteel International SA, Italy
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- PNOC Exploration Corporation - Philippines
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
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