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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, 08 November 11
COAL MINER ABM INVESTAMA PLANS $290M PUBLIC OFFERING - JG
The Jakarta Globe reported that, ABM Investama, an Indonesian coal miner controlled by the Hamami family, plans to raise as much as Rp 2.6 trillion ...
Monday, 07 November 11
CHINA'S COAL IMPORTS STEAM AHEAD
Chinese seaborne coal imports have grown greatly in recent years, up from 39.2mt in 2008 to 167.7mt in 2010, with the result that China became a net ...
Saturday, 05 November 11
DEMAND SLUMP THREATENS MORE PAIN FOR BULK VESSELS - VISTAAR
COALspot.com - The market continued to fall with BDI dropping below 2,000 points by around 10 pct and closing at 1817 points. The cape index also co ...
Saturday, 05 November 11
BERAU STARTS TO EXPLORE BINUNGAN SITE - INSIDER STORIES
Insider Stories reported that, coal miner PT Berau Coal, a 90% owned subsidiary of PT Berau Coal Energy Tbk (BRAU), is busy to hold exploration in B ...
Friday, 04 November 11
INDIAN IRON ORE MARKET REMAINS DEAD - FEARNLEYS
Handy
The Atlantic market kept its strong position from last week. Even with fewer fixtures reported. Fronthauls still around 25k, wit ...
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- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Timah Investasi Mineral - Indoneisa
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Indian Oil Corporation Limited
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Singapore Mercantile Exchange
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- PTC India Limited - India
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Manunggal Multi Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Lanco Infratech Ltd - India
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- The University of Queensland
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
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