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