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Tuesday, 17 March 15
NEARLY 17% OF US COAL PRODUCTION UNECONOMIC AT CURRENT MARKET PRICING - WOOD MACKENZIE
 COALspot.com: Close to 17% of forecast 2015 US coal production is at risk of idling or closure, totalling 162 million short tons (Mst), as these mine's total cash costs plus sustaining capital expenditures exceed current market pricing, according to Wood Mackenzie's latest coal market outlook.
Wood Mackenzie says that the majority of the coal at risk is produced in Central Appalachia where approximately 72% of the total output is unprofitable. Years of declining productivity, thinning seams, increasing strip ratios, more stringent government regulations, and a high paid workforce have taken their toll and made Central Appalachia the highest cost region within the US. Other US regions also have substantial amounts of coal at risk, ranging from 47% of production in Southern Appalachia to a low of eight percent in both the Western Bituminous and Powder River Basin. In aggregate, this equates to approximately 14% of US thermal coal production and 58% of metallurgical coal production being at risk.
Dale Hazelton, Senior Research Analyst at Wood Mackenzie explains, "Based on current economics there are a significant number of mines unable to cover their operating costs plus sustaining capital. Despite this, mine closures, while not rare, certainly aren't happening frequently. Part of the reason for this is the amount of thermal coal sold on the open market is very small compared to that sold under contract. Contracts can cover multiple years, and prices may have been agreed well before the current market's lows. A producer may also be able to beat the market prices as they have a valuable niche-quality coal, such as stoker coal, or the location of the mine is near an end-user providing a transportation advantage over competitors."
According to Wood Mackenzie, there are other reasons for not idling or closing a mine: "It is possible the company is actively shopping the assets and having them currently in operation is more attractive to buyers. A company may also need to generate certain levels of revenue or cashflow to avoid triggering debt covenants that result in accelerated debt payments or higher interest rates. Some companies may also be willing to temporarily lose a certain amount of money on some mines where the losses from operating are less than not yet high enough to require idling or closing the operation.
"This is particularly true for some of the assets recently purchased by new mining companies or private equity firms. In those cases, the companies understand that there will be some period of losses as management gets costs under control. The end-game here is to maintain operations and customer relationships until the eventual recovery," notes Hazelton.
However, Wood Mackenzie emphasizes that for prices to rise, fundamentally one of two things must happen: either the global demand for steel and power must increase or the supply of coal must decrease. Hazelton adds, "The growth prospects for steel demand remain tenuous at best as many countries’ economies remain fragile. The recent strength of the US dollar also encourages non-US producers to grow their production as a strengthening US dollar compared to their local currency effectively lowers their costs of production when denominated in US dollars."
Furthermore, natural gas prices in the US remain at very low levels, resulting in higher levels of coal-to-gas switching in power generation. Wood Mackenzie's outlook notes that additional cost cutting measures are starting to reach limits as producers globally have already cut costs significantly, serving to suppress coal prices further. Therefore, the only practical way for the market to get back into balance is for producers to cut production. "This needs to happen sooner rather than later, either voluntarily or involuntarily through bankruptcy, as the losses these mines are generating cannot be sustained," concludes Hazelton.
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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Monday, 23 March 15
CFR SOUTH CHINA COAL SWAP: Q3 DELIVERY HAS FALLEN 7.93% MONTH-ON-MONTH
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery declined US$ 4.09 (-7.06%) per MT month over month and US$ 2.00 (-3 ...
Monday, 23 March 15
SEABORNE WORLD COAL TRADE: GROWTH +5% - GERMAN COAL IMPORTER ASSOCIATION
Hard Coal Market 2014: Despite The Energy Turnaround, Hard Coal Imports To Germany Rise By More Than 6%, Although Hard Coal-Fired Power Generation ...
Sunday, 22 March 15
DRY BULK RATES CONTINUED TO RISE THIS WEEK
COALspot.com: The freight market was steady this week as all the segments increased after many weeks of weak trend.
The Baltic Dry Index (BDI) ...
Friday, 20 March 15
HARD COAL MARKET 2014: DESPITE THE ENERGY TURNAROUND, HARD COAL IMPORTS TO GERMANY RISE BY MORE THAN 6% (PART 1)
Hard Coal Market 2014: Despite The Energy Turnaround, Hard Coal Imports To Germany Rise By More Than 6%, Although Hard Coal-Fired Power Generation ...
Friday, 20 March 15
U.S. WEEKLY COAL PRODUCTION SHOWS 5.9% INCREASE WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.5 million short tons (mmst) of coal ...
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- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Intertek Mineral Services - Indonesia
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Therma Luzon, Inc, Philippines
- Tata Chemicals Ltd - India
- The University of Queensland
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Planning Commission, India
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
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