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Monday, 09 February 15
AUSTRALIAN COAL PRODUCERS BEST POSITIONED IN OVERSUPPLIED MARKET; US MINES MOST AT RISK - WOOD MACKENZIE
 In a 2015 global coal outlook report, Wood Mackenzie says that Australia and Indonesian coal suppliers will see some upside in the difficult months ahead as they continue to capture market share of coal exports from higher cost producers. Further modest productivity gains, the rapid fall in oil prices and currency devaluation in Australia and Russia will help lower costs. Therefore, Australian mines stands in a relatively strong position compared with higher cost suppliers - particularly those in the US - which are at much greater risk of closures this year. Even with increased closures and reduced US supply, Wood Mackenzie says they do not foresee sufficient volume exiting to balance the market and support price recovery. Lower-than-anticipated demand, especially from China combined with persistent production will be key factors that will sustain the weak market environment.
Australian producers best positioned in 2015
Mr Rory Simington, Principal Asia Pacific Coal Analyst says, “Australia is a standout competitor in both the metallurgical (met) and thermal coal trade, but particularly the former. Comparing 2014 from 2013, while global met coal import demand reduced by about 8 Mt, Australian exports rose by around 14 million tonnes (Mt), growing seaborne market share from 58% to 64%. The scalability of Australian mines and their high coal quality has enabled the displacement of major competitors in US, Canada and Indonesia. This trend is likely to continue thanks to a continued strong operating performance plus currency depreciation. On the other hand, US suppliers, many of which exhibit high costs, will not see the cost relief that currency devaluation brings to Australia.”
Furthermore, increased competition will come from higher Mozambique exports this year as Vale’s Nacala transport corridor ramps up indicating another year of aggressive pricing as producers fight to secure sales. In thermal coal, Australian exports were also strong, leaping 20Mt despite seaborne demand remaining essentially flat last year.
Lower costs discourage large-scale shutdowns
Despite a traumatic 2014 for the coal industry, mine shutdowns were relatively muted. Mr Simington explains, ”In fact metallurgical supply reductions were more than offset by the reduction in Chinese import demand, resulting in increased overcapacity. Although overall closures will accelerate this year, they will unlikely redress the imbalance.” Costly take or pay obligations in the event of closure, makes it more expensive for mines to shutdown than operate at a loss. As such, they remain in production and hamper the return to tighter market conditions. The recent low oil price and exchange rate has driven cost relief for Australia, Indonesia and Russia, which will further reduce the likelihood of wholesale supply cuts as well as delay any price recovery.
China uncertainties depress demand in oversupplied market
China’s economic rebalancing will continue to affect power demand growth and therefore thermal coal requirements. Of critical importance to the seaborne trade will be the effects of Government policies designed to protect the environment as well as domestic coal suppliers. Mr Robin Griffin, Research Director for Global Metallurgical Coal, says, “Current industry focus is on the new trace element restrictions for imported coal. We see most seaborne supply meeting the new guidelines but import levels are affected due to the uncertainty of the accuracy of coal quality tests and delays it may cause to the delivery process. Another big uncertainty to watch is the lengths to which the Chinese Government will go to protect its domestic industry.” Wood Mackenzie says stricter limits on imported coal quality is possible and the Government could make an aggressive move to waive the 17% value added tax (VAT) charged on coal sales which could considerably enhance the competitiveness of Chinese coal and enable some of the best quality and lowest cost Chinese coking coal to compete into Japan, South Korea or Taiwan. Should this occur, worsened oversupply conditions could occur in 2015.
Mr Griffin says “As China makes up 22% of seaborne trade and is expected see continued domestic oversupply, the country will be a major cause of depressed global import demand this year. Market fundamentals outside of China also remain uninspiring, for both metallurgical and thermal coal. Under such circumstances a material price recovery is unlikely this year”.
M&A activities to pick up in 2015
“Mine asset valuations have fallen considerably over the last three years due to the weakening market. Whilst low prices endure more companies will look to shed assets, perhaps to decrease debt or to allow a greater focus on their highest value operations. The negative price environment will persist through 2015 but not forever. Given our expectation of long term strength in coal demand fundamentals, the present market conditions offer a window of opportunity for both suppliers and buyers to consolidate their positions in the industry. We expect M&A to start picking up this year particularly for companies who want to gain a foothold in the industry for the long term.”
About Wood Mackenzie
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions
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Tuesday, 03 March 15
INDIAN THERMAL COAL IMPORTS: STEAMING FORWARD - CLARKSONS
Coal-fired power stations comprise around 60% of India’s power output, and with domestic supply issues and favourable international coal pric ...
Tuesday, 03 March 15
Q4' FOB INDONESIA COAL SWAP CLOSED 2% LOWER COMPARED TO Q2 CLOSING PRICE OF $ 47.47
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose month on month and declined week over week.
The Q2 swap increased US$ 2.24 ...
Tuesday, 03 March 15
FOB RICHARDS BAY COAL SWAPS: Q2 UP 9.60%; Q3 UP 9.75% W-O-W
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month and week on week.
The Q2 swap has soared US$ 5 ...
Monday, 02 March 15
CFR SOUTH CHINA COAL SWAP FOR Q2 DELIVERY REACHED $ 57.50 PMT W/E 27 FEB 2015
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 1.37 (+2.44%) per MT month over month and declined US$ 0.42 ...
Monday, 02 March 15
BORYEONG POWER PLANT OF KOMIPO TO IMPORT 140K OF SUB-BITUMINOUS COAL FOR Q2
COALspot.com - Korea Midland Power Co. Ltd. (KOMIPO) is inviting bids from coal producers, marketing companies, or traders to supply of 140,000 (70 ...
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- Binh Thuan Hamico - Vietnam
- London Commodity Brokers - England
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Central Electricity Authority - India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Australian Coal Association
- Marubeni Corporation - India
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Intertek Mineral Services - Indonesia
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Jindal Steel & Power Ltd - India
- Bhoruka Overseas - Indonesia
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