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Thursday, 04 March 10
GLOBAL COAL PRICES GETS SUPPORT FROM EM DEMAND
 Commodity Online reported that, AP12 coal prices look well supported in 2010 thanks to positive outlook for Chinese coal demand whereas coal demand in Europe, rest of the world is shockingly low and stocks have hardly drawn despite the coldest winter in decades, according to an analysis by Bank of America- Merrill Lynch (BofAML).
Japan, by far the biggest importer of thermal coal, cut back on its appetite for coal by almost 20 million mt last year, to 117million mt. Europe took in 22 million metric tons less last year, driven particularly by Spain, Italy, the UK and France as low natural gas prices supported switching out of coal in the power sector
Last year China imported 70.4 mn mt of thermal coal, relative to outflows of 7.8 mn in 2008. China's imports will witness slowdown due to ramping up of internal proudction, according to BofAML.
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“Last year China imported 70.4 mln mt of thermal coal, relative to outflows of 7.8 mln in 2008. China's imports will witness slowdown due to ramping up of internal production” - BofAML
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Coal prices are protected to the downside by the high marginal cost of production, particularly in Russia. However, the oversupply in Europe will likely keep a lid on API2 prices near-term.
API2 front month coal increased from a low of $75/mt in mid December to $97/mt in early January, sharply outpacing other energy markets. Heavy snowstorms led to local power shortages, particularly in the South of the country.
Perhaps more importantly, a much stronger-than-expected cyclical rebound in China drove power generation growth to new highs, up 33% YoY over the past three months, helping to fuel coal demand. Other Asian countries also experienced a turn-around in electricity generation. In turn, due to the heavy snowfall and rail constraints, China resorted to seaborne coal as opposed to domestically produced material. Elsewhere, a glaringly cold winter in Europe provided some support to sentiment. Producer infrastructure constraints, particularly in Australia, South Africa and Indonesia, temporarily tightened the international coal market.
Ultimately, the 3-week rally in coal did not last and prices reversed sharply in mid January as the snowfalls in China receded and the USD strengthened. In recent weeks, front-month API2 coal traded down to $72.75/mt and has been in the $72/mt to $79/mt range. Chinese imports in January, though still at a very high level, cooled off month-on-month basis. Moreover, big European coal users, like Germany, France and the UK, recorded steep demand losses in January, at a time that they experienced the sharpest winter in decade, BofAML analysis said.
In the UK for instance, coal demand in December equalled 4.6 million mt, down from 6.3 million mt in the prior year. Preliminary data indicates that the trend continued over the past weeks.
Traditional European coal suppliers are doing what they can to manage supply to Europe. Russia has reportedly closed some mines to keep exports to Europe low. South Africa is actively diversifying away from Europe towards demand outlets in Asia Pacific. During 2009, 31% of South African exports went to India, from virtually nothing in previous years. That trend was particularly pronounced over the past months. Although in small volumes, South Africa has also been pushing material into China. More absurdly, Colombia-- who typically exports 50-60% of their coal to Europe with the balance going to the Americas--
has now detected interest in Asia.
Colombia exported small volumes to China in December to the tune of 1.5-1.7 million mt, for the first time ever. Of course, sharply lower freight rates are helping these trade flows. As we see continued supply of new Capesize vessels in 2010, freight will likely remain cheap by historical standards in the near-term. Once freight recovers, possibly at the end of this year with the cyclical demand recovery soaking up the supply in ships, these trade-flows are unlikely to be sustainable.
Europe's coal inventories remain at excessive levels at key import ports in Rotterdam and Amsterdam as supply exceeds demand. BofAML sses strong relationship between spreads in AP12 and coal inventories. Hence it is no surprise that the contango in API2 has steepened even more, with front month to front calendar year spreads at the widest since July last year , reflecting the oversupply in the European market and bulging inventories.
Coal markets in the Pacific are a lot tighter, with inventories relatively low in key coal consumers like China, India and South Korea. Meanwhile, the Newcastle coal market is trading in backwardation. Several coal mines in Australia had to declare force majeure in response to severe rainfalls on the east coast which flooded mines, while major rail lines had to close, clogging up the coal chain infrastructure. 47 vessels are currently again lining up outside Newcastle , underscoring that infrastructure problems will not go away easily, BofAML analysis said.
Overall, the outlook for emerging market coal demand remains very positive though. China is expected buy more seaborne coal as as the Chinese Renminbi is likely to be revalued by mid year. In BofAMl analysis, a CNY revaluation is undoubtedly positive for global thermal coal prices. Other EMs likeMexico and Turkey are sharply ramping up coal imports. India continues to suffer from a negative coal balance and will have to rely on the seaborne market for supplies. On a medium-term horizon, we believe that global seaborne coal prices have immense upside from the current level given the growth in coal-fired generation capacity.
Source:Commodity Online - By Madhurima R S
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Tuesday, 06 April 10
ASIAN INVESTORS EYE NIGERIA MARITIME INDUSTRY
Investors from the Asian region are considering investing in the Nigerian maritime sector, which has huge opportunities and potential. One of such p ...
Monday, 05 April 10
RI TO SET REFERENCE FOR COMMODITIES - THE JAKARTA POST
The Jakarta Post reported that, Indonesia is set to help establish global reference prices for mining and agricultural commodities, with the establi ...
Monday, 05 April 10
MARCO POLO MARINE SECURES US$20 MILLION 4-YEAR COAL TRANSSHIPMENT CONTRACT
COALspot.com: Accordign to Mraco Polo Marine website, Singapore Exchange Mainboard-listed Marco Polo Marine Ltd, a growing integrated marine logisti ...
Saturday, 03 April 10
SHIPS OPENING FAREAST CONTINUE TO BE STRUGGLING FOR CARGOES - VISTAAR
COALspot.com: The dry bulk freight market continues to be under pressure and all the indices were down this week except for Cape size index which wa ...
Friday, 02 April 10
XSTRATA RAISES BENCHMARK COAL PRICE AS MUCH AS 40% - BLOOMBERG
Bloomberg reported that, Xstrata Plc, the world’s largest exporter of coal used for power, raised benchmark prices for the fuel to an unidenti ...
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- Mjunction Services Limited - India
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Binh Thuan Hamico - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- White Energy Company Limited
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
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