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