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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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Thursday, 18 March 10
INDONESIAN COAL PRODUCTION EXPECTED TO BEAT EARLIER FORECAST
The Jakarta Globe reported that, the government expects coal output this year to exceed its initial projection of 250 million metric tons as the dri ...
Thursday, 18 March 10
COAL PILING UP AT EAST COAST PORTS ON RAKE SHORTAGE
Business Line reported that, more than three million tonnes (mt) of imported coal are awaiting evacuation at the east coast ports of Paradip, Visakh ...
Tuesday, 16 March 10
INDONESIA ROUND VOYAGES WERE GETTING BETWEEN HIGH TEENS - BRS
Another strong week for the bulk market and rates in all segments are now back above pre-Chinese New Year levels. Atlantic volumes remain robust, an ...
Tuesday, 16 March 10
MADHUCON GETS MINING LICENSE IN INDONESIA
Business-Standard reported that, PT Madhucon Indonesia, a subsidiary of the Hyderabad-based infrastructure company Madhucon Projects Ltd, has been g ...
Monday, 15 March 10
BOB KAMANDANU ON INDONESIAS PEAK COAL PRODUCTION, ENERGY SECURITY AND EXPORTS TO INDIA
Bob Kamandanu, the chairman of Indonesian Coal Producers Association (APBI), said the country has an estimated 50 to 70 years of coal reserves.
T ...
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- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Dalmia Cement Bharat India
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- India Bulls Power Limited - India
- Mercator Lines Limited - India
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- Australian Coal Association
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Billiton Holdings Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Power Finance Corporation Ltd., India
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kideco Jaya Agung - Indonesia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- CNBM International Corporation - China
- PTC India Limited - India
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- Renaissance Capital - South Africa
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