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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, 04 March 10
BANPU KEEPS JORONG OUTPUT AT 2M TONNES
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is maintaining an output target of 2 million tonnes this year from its Jorong mi ...
Thursday, 04 March 10
THE INDIAN MARKET WAS STILL STRONG - FEARNRESEARCH
HANDY
Activity has gradually improved in the Atlantic throughout the week. All areas&n ...
Thursday, 04 March 10
THREE NEW GLOBAL PRICES INDEXES FOR COKING COAL
Commodity Online reported that, On February 26, Energy Publishing Co. broke new ground in the coal-marketing industry when it began publishing three ...
Tuesday, 02 March 10
INDIA WAS AGAIN THE WINNER IN THE EAST, WITH SUPRAMAXES FIXING CLOSE TO US$40,000/DAY FROM THE WEST COAST
There was little movement in the BDI this week but behind the scenes, the Supramax and Handy size segments posted significant gains, correcting the ...
Tuesday, 02 March 10
INDONESIA'S PROTECTED FORESTS NOW OPEN TO DEVELOPMENT
The Jakarta Globe reported that, President Susilo Bambang Yudhoyono has signed a decree to allow mining, power plants and other projects deemed stra ...
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- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Independent Power Producers Association of India
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Economic Council, Georgia
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Orica Mining Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- VISA Power Limited - India
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- The University of Queensland
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- Electricity Authority, New Zealand
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
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