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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, 18 February 10
COAL MINERS FACE SHUTDOWN OVER RECLAMATION FUNDING
Three coal mining companies may be forced to temporarily stop operations this year if they fail to provide funding for a site-reclamation program.
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Thursday, 18 February 10
DECOUPLING FROM OIL PRICES ON STRONG GLOBAL ENERGY DEMAND
A recent coal market conference in Singapore focused on two main issues –— the demand for coal as a source of energy, and coal pricing.& ...
Thursday, 18 February 10
INDONESIA TO INVITE BIDS FOR $1.5 BLN COAL RAILWAY IN MAY
Indonesia plans to invite investors to bid for contracts to build a $1.5 billion coal railway line in Central Kalimantan, a planning ministry offici ...
Thursday, 18 February 10
INDONESIA ZONING RULE THREATENS MINING - INDUSTRY
Reuters reported that, confusion over a new Indonesian land use regulation could halt the operations of some mining firms, providing a new threat to ...
Wednesday, 17 February 10
LAND OVERLAPPING UNAVOIDABLE
Land overlapping issues in the mining industry is unavoidable due to the availability of mineral, coal, and oil resources which are often located be ...
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- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Minerals Council of Australia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- SN Aboitiz Power Inc, Philippines
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Coal and Oil Company - UAE
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Australian Coal Association
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Planning Commission, India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
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