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Wednesday, 14 March 12
GLOBAL THERMAL TRADE FLOW CHANGES WILL ENSURE SECURITY OF THERMAL COAL SUPPLY, ALBEIT AT A HIGH PRICE - WOOD MACKENZIE
 Wood Mackenzie Says Global Thermal Trade Flow Changes Will Ensure Security of Thermal Coal Supply, Albeit At a High Price Seaborne thermal demand by 2030 will be driven by China at 1btpa and India at 400mtpa
At Coaltrans India today, Wood Mackenzie said that a significant growth in demand for seaborne thermal coal from China and India- the top two demand drivers by 2030, will lead to a change in global trade patterns. The increase in the seaborne trade will ensure the long-term security of thermal coal supply in the Asian region. Despite forecast ample supply, Wood Mackenzie indicated that investors and buyers should expect prices to stay at traditionally high levels over the foreseeable future.
Mr. Prakash Sharma, Presenter and Coal Market Analyst says, “China has evolved rapidly to become the world’s largest thermal coal importer with seaborne demand set to grow from 175 million tonnes per annum (mtpa) in 2011 to 1billion tonnes per annum (btpa) by 2030. India is also set to overtake Japan as the second largest consumer of thermal seaborne coal by 2030, growing from approximately 80 mtpa in 2011 to 400 mtpa. India’s demand may be even higher if domestic supply is constrained by delays in associated rail and port infrastructure projects.”
A major expansion in global thermal coal trade, concentrated on Asia and driven by demand from both China and India, is expected over the next 20 years. Rapid economic expansion will fuel demand for electricity, and the heavy reliance of Asian economies on coal will lead to an increase in trade flows. In the near-term, the market will be tight but a significant growth of thermal seaborne supply is expected to come from existing and emerging basins, creating a change in trade flows that will feed long-term demand.
Mr. Sharma says, “With Asia at the centre of future thermal coal import requirements, current Pacific Basin suppliers will be first in line to benefit. Waiting in the wings though are emergent players some of which, particularly in Australia and the US, will make up a significant portion of their region’s future supply growth.”
“The emerging basins to keep an eye on are Australia’s Surat and Galilee basins, Indonesia’s Kalimantan and Sumatra basins as well as basins in Mozambique, Mongolia, Russia’s Far East, and the west coast of the United States. South African coal will continue its migration from Europe to Asian markets, and other Atlantic Basin suppliers such as Colombia and the eastern US will also participate, albeit marginally.”
Despite aggressive expansions in thermal coal supply, long-term prices will defy expectations of a drop in prices, instead remaining high in the seaborne market. There may be short term seasonal fluctuations such as a dip in Q2 prices this year due to economic uncertainty but in the long-term, the Newcastle reference coal price will increase progressively and is forecast to remain above free on board (FOB) US$120/t in real 2011 US dollar terms.
The high prices can be attributed firstly to higher production costs and the substantial investment required in new mines and supporting infrastructure development particularly for new reserves from significant emerging basins. These are in remote regions far away from exiting port facilities. Secondly, cost pressures come from changing fiscal regimes such as the carbon tax in Australia and minimum export price regulations in Indonesia. Lastly, Wood Mackenzie expects a declining trend in export thermal coal quality as large volumes of low rank coals from Indonesia enter the seaborne market.
In summary, Mr. Sharma says, “Demand for seaborne thermal coal will grow exponentially from now until 2030, particularly as a result of China and India’s needs. While this demand will find supply from a change in trade flow patterns, we think that prices will not weaken with the oncoming supply. Rather, cost pressures, infrastructure bottlenecks and a decrease in export coal quality all combine to hold prices at traditionally high levels.”
About Wood Mackenzie
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.
Wood Mackenzie is a research consulting company and it is our preference is to be referred to as research consultants.
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Monday, 13 February 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The current sentiment in the dry market resembles memories from the end of 2008, when the Baltic Dry Index closed at the level of 663 points on Dece ...
Sunday, 12 February 12
INDONESIA HAS ISSUED A REGULATION TO BAN THE EXPORT OF UNPROCESSED MINERALS AND METALS BY 2014
COALspot.com - The Indonesian government has finally issued a ministerial decree (7 Year 2012 dated 6 February 2012) to ban the export of unpro ...
Sunday, 12 February 12
THE BALTIC DRY INDEX CLIMBS 10.51%
COALspot.com - "The markets touched record lows not seen since mid 80’s. However there was some good news with signs of market recovery a ...
Saturday, 11 February 12
A SNAPSHOT ON THE ECONOMIC AND SHIPPING ENVIRONMENT - GOLDEN DESTINY
The week was highlighted with intense worries in the eurozone for Greece to secure its second bailout of $130billion by applying a ...
Saturday, 11 February 12
WILL HISTORY REPEAT ITSELF IN THIS SHIPPING CYCLE? - CLARKSONS / HELLENIC SHIPPING
A slightly dubious "best man" joke runs as follows… Best man (giving his wedding speech): "Have you noticed how history repeat ...
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- Eastern Energy - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Electricity Authority, New Zealand
- The Treasury - Australian Government
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Power Finance Corporation Ltd., India
- Indo Tambangraya Megah - Indonesia
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- The University of Queensland
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
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