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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, 09 March 10
MINING LAW OPTIMIZES SECTOR
Law No. 4 / 2009 on Mineral and Coal Mining have given a new direction for the future of mining in Indonesia, including Domestic Market Obligation, ...
Tuesday, 09 March 10
STRONG REBOUND IN ALL THE DRY BULK SEGMENTS THIS WEEK
There was a strong rebound in all the dry bulk segments this week, leading to an 18% jump in the Baltic Dry Index.
The Cape and Panamax markets s ...
Tuesday, 09 March 10
L&T POWER EYEING COAL MINES IN AUS, INDONESIA
L&T Power Development Company, a part of the Larsen & Tubro Group, plans to acquire coal mines in Australia and Indonesia, a top company off ...
Tuesday, 09 March 10
BHP AGREES SHORTER-TERM COAL DEALS WITH EUROPEAN, ASIAN CUSTOMERS
Diversified miner BHP Billiton on Monday reported that it had reached sales terms for a significant portion of its hard coking coal volumes for 2010 ...
Monday, 08 March 10
KPCL TO IMPORT 0.9 MILLION TON OF 6000 GCV COAL
COALspot.com: India's Karnataka Power Corporation Ltd is seeking to import 0.9 million metric tons of 6000 kcal/kg (adb) Gross Calorific Value stea ...
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- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Australian Coal Association
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Marubeni Corporation - India
- White Energy Company Limited
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- IHS Mccloskey Coal Group - USA
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Commonwealth Bank - Australia
- The University of Queensland
- CIMB Investment Bank - Malaysia
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