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