We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Tuesday, 08 December 09
VOLATILE COAL PRICES SPUR ASIAN HEDGING
 Volatile coal prices are forcing staid Asian power firms to change the way they buy fuel, setting the scene for a hedging boom as a growing array of investment banks come forward to aid the firms' first forays into coal derivatives.
A big prize awaits banks such as Goldman Sachs, Morgan Stanley and JPMorgan if they can grab a share of this business, since the utilities account for about 60% of total seaborne steam coal trade of around 600 million tonnes.
Their participation could double the Asian coal derivatives market to some 400 million tonnes over the next two years, trade sources say, although there are hurdles to overcome before Asia can match Europe, where derivatives volumes exceed physical trade by several multiples.
"We're starting to see a crack in the armour among the Japanese utilities this year and there's now hedging demand out of the sector," Geoff Clear, Head of Commodities Trading at Australia & New Zealand Bank, told Reuters.
"The coal derivatives market in Asia is in a good space and is ready to take off."
Although the first over-the-counter coal trading deals were introduced to Asia about eight years ago through globalCOAL, North Asian buyers prefer to sign long-term contracts to guarantee low prices and to secure premium quality coal.
But sharp volatility in prices, which swung between USD 50 and USD 200 a tonne last year, means this decades-old method is bringing increased risk to buyers, who can sometimes be paying far more than prevailing spot rates.
Experience has also taught utilities that purchasing coal at a fixed price does not guarantee supplies, as miners have delayed shipments when the index rises above contract prices.
"We see the market changing. Many utilities that employed very traditional ways of buying coal are now open to new hedging instruments," said Patrick Markey, Chief Operating Officer of globalCOAL Singapore, an electronic trading platform.
This year, Japanese utilities have bought about 20% of their annual coal needs, or about 26 million tonnes, through index-linked contracts and the proportion is expected to rise to around 30% in 2010, producers and traders said.
For the first time, Korea Western Power Co is also planning to buy between 10% and 20% of its annual coal requirements of 12 million tonnes through index-linked contracts next year, a utility source said.
As Asian utilities are increasingly accepting of contracts linked directly to the Newcastle price index, globalCOAL's NEWC swaps become an obvious risk-management tool to reduce most of the worry around volatility.
The size of the global coal derivatives market is hard to gauge, but brokers said it has been growing rapidly, to 1.3 billion tonnes in 2006 from an estimated 750 million tonnes in 2004.
Around 2 billion tonnes of coal derivatives are expected to be traded globally in 2009, of which the globalCOAL Newcastle market accounts for about 10%, up from just five percent two years ago -- reflecting the rapid growth potential of the Asian derivatives market.
"We are waiting for the big entrance of Japanese and Korean utilities into the swaps market," said Clear. "Some of them are still weighing up their choices, but there is now a marked change in their attitudes."
Recent participation of some Japanese trading houses in the paper market was also a sign that utilities are now open to having some risk products embedded into their traditional bilateral contracts, he added.
Some industry observers said the coal trading joint venture set up by Japan's Chubu Electric and French power provider EDF in 2007, called Chubu Energy Trading (CET), may have first paved the way for change.
While some traditional coal users were dipping their toes cautiously into the market, CET took big strides. In just two years, the unit was buying about half of Chubu's 10 million tonnes of annual coal needs through the spot market -- and managed to stay profitable in a period of wild coal price swings
Other utilities to recently step up hedging include Japan's No. 1 utility, J-Power, which has added a former Barclays commodity trader to its hedging team, and South Korea's East-West Power Co Ltd, which is looking to partner LG Corp to set up a coal trading unit.
Challenges ahead
Despite expected growth in the Asian coal trading market, trade sources say it will take some time before liquidity in the Pacific coal market catches up with its European counterpart, where the value of derivative trading exceeds the underlying market by many multiples.
"The innate conservatism of the Japanese utilities is a stumbling block," said a senior trader at an investment bank.
"The middle management is all for it. They understand how it can reduce fuel costs but have a hard time convincing their bosses, who still hold the view that hedging will introduce another risk to the equation."
A full-scale deregulation of the power markets is also needed to drive Asian utilities to search for the lowest-cost fuel.
Despite having undergone a partial deregulation, utilities in Japan and South Korea still enjoy a large degree of regional monopoly, while Taiwan's power market is still state-owned. With the freedom to pass on any fuel cost rises to users, there is no strong impetus to hedge costs.
"Many Japanese utilities are hedging now because they want a fixed price for their coal as opposed to getting the lowest price," said a trader at one of the top Japanese utilities.
Other hurdles to overcome include the establishment of a widely accepted Indonesian market index, traders and buyers said.
Although globalCOAL and Argus provide a weekly average price for different grades of Indonesian coal, market players say there are too few trades to get an accurate view of prices.
"Considering how Indonesia is the world's largest thermal coal exporter, there's definitely a need for the index to mature and to have some sort of a forward curve before utilities can use that as a hedging tool," said a trader at an investment bank.
Source: Money Control
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 13 January 10
CONSOL SELLS FIRST COAL TO CHINA
Coal and natural gas company CONSOL Energy Inc.made its first sale of high-volume coking coal to Asia from its Bailey Mine in Northern Appalachia. T ...
Tuesday, 12 January 10
COAL PRICE FORECAST RAISED AT ANZ ON STRONGER CHINESE DEMAND
Power-station coal price forecasts for this year were raised 19 percent by Australia & New Zealand Banking Group Ltd. on rising demand from Chin ...
Tuesday, 12 January 10
BUMIS SALE CONTRACT ONLY REACHED 35 PERCENT
PT Bumi Resources has only completed 35 percent if its coal sale contract this year. “More than 65 percent of our sale volume did not have a c ...
Monday, 11 January 10
THE MARKET IS LIKELY TO BE STEADY - VISTAAR SINGAPORE
COALspot.com (Singapore): The freight market for the first week of the year was quite active and the market especially in the Panamax and Supramax s ...
Monday, 11 January 10
CHINAS COAL EXPORT MAY DECLINE 50% IN 2009
Preliminary data released by China's General Administration of Customs (GAC) on Wednesday showed that China's coal export reached 2.05 million ton ...
|
|
|
Showing 6101 to 6105 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Toyota Tsusho Corporation, Japan
- European Bulk Services B.V. - Netherlands
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- PTC India Limited - India
- Orica Australia Pty. Ltd.
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Rio Tinto Coal - Australia
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- Bhushan Steel Limited - India
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Minerals Council of Australia
- The University of Queensland
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
|
| |
| |
|
