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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, 16 February 10
KPMG PENS 6-POINT STRATEGY FOR COAL INDIA RESTRUCTURING
Coal India Ltd (CIL) has appointed KPMG Advisory Services Pvt Ltd to advise on consolidating its position as the country’s prime energy provid ...
Monday, 15 February 10
MINING LAW TO BE REVISED
Law No. 4 of 2009 on mineral and coal mining will be revised after a working visit of the Bangka Belitung (Babel) Provincial legislative assembly (D ...
Monday, 15 February 10
EURO COAL PRICES SOFTEN AS CHINESE LUNAR NEW YEAR HOLIDAYS START
Prices of prompt cargoes of coal for delivery into Europe weakened last week on a lack of European demand and market nerves over the possible impact ...
Monday, 15 February 10
INDONESIAN COAL SUFFERS SETBACK AS SUMATRA RAIL LINE HELD UP AGAIN
State-owned coal miner PT Tambang Batubara Bukit Asam’s $1.06 billion rail project in Sumatra faces more delays, and the cost of the project i ...
Monday, 15 February 10
MEC INFRA TO COMMISSION INDONESIA RAIL PROJECT
A joint venture between Ras Al Khaimah Investment Authority (Rakia) RAK Investment Authority and Minerals Energy and Commodities Holdings, a f ...
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- The University of Queensland
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Krishnapatnam Port Company Ltd. - India
- Videocon Industries ltd - India
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Planning Commission, India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
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