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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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Wednesday, 16 November 11
TAX OFFICE VOWS TO CRACK DOWN ON COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry’s Directorate General of Taxation says that it will strengthen its supervision of coal mi ...
Wednesday, 16 November 11
A STRONG WEEK FOR THE CAPES - BRS
A sharp bounce by the Cape market pushed the BDI up by 3% last week. This was despite a softening in the other indices with the Panamax, Supramax an ...
Monday, 14 November 11
BORL SEEKS 660K MT OF LOW SULPHUR COAL
COALspot.com - BORL India has issued a tender for around 660,000 MT of 4500 - 5500 kcal/kg sub-bituminous Coal.
Bharat Oman Refineries Ltd ...
Sunday, 13 November 11
BUNKER PRICES REMAINED FIRM
COALspot.com - The market seemed to recover this week with the BDI and Cape Index up.
The BDI was up by only about 2.86 pct closing at 1835 point ...
Saturday, 12 November 11
COALINDO ENERGY LAUNCHED INDEX FOR 3400 GAR COAL
COALspot.com - PT Coalindo Energy, in cooperation with Argus Media Limited, launched the coal index for low-rank coal with a calorific value of 3,40 ...
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- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- London Commodity Brokers - England
- PTC India Limited - India
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dalmia Cement Bharat India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- McConnell Dowell - Australia
- India Bulls Power Limited - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- VISA Power Limited - India
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
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