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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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Wednesday, 18 March 15
Q2 INDONESIAN COAL SWAP DROP 1.45% M-O-M; GAIN 0.63% W-O-W
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and gained week over week.
The Q2 swap fell US$ 0.70 (1.45%) ...
Tuesday, 17 March 15
GAS TO CHALLENGE COAL IN THE ASIAN POWER GENERATION MIX - WOOD MACKENZIE
KNOWLEDGE TO ELEVATE
Wood Mackenzie says that coal is facing increasing competition from gas in the power sector. Coal has dominated as the fu ...
Tuesday, 17 March 15
RIO TINTO PAID US$ 7.1 BILLION IN TAXES IN 2014
COALspot.com: Rio Tinto has published its latest Taxes paid report, detailing the US$7.1 billion in taxes paid by the company around the world in 2 ...
Tuesday, 17 March 15
Q3' SA COAL SWAP CLOSED $57.30 PMT W/E 13 MARCH
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and gained week on week.
The Q2 swap has fe ...
Monday, 16 March 15
MAKING THE WORLD GO ROUND - SEABORNE TRADE! - CLARKSONS
Money, or even love if you prefer, are claimed to make the world go round. For the shipping world, however, it’s trade that sets things spinn ...
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Parry Sugars Refinery, India
- Orica Australia Pty. Ltd.
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Eastern Energy - Thailand
- PTC India Limited - India
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
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