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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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- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Essar Steel Hazira Ltd - India
- Siam City Cement PLC, Thailand
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Tata Chemicals Ltd - India
- Sarangani Energy Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Deloitte Consulting - India
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Planning Commission, India
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- McConnell Dowell - Australia
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Lanco Infratech Ltd - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Holcim Trading Pte Ltd - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Billiton Holdings Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
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