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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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Saturday, 13 February 10
COAL INDIA 2010/11 COAL IMPORTS TO JUMP - EXEC
Coal imports by state-run Coal India Ltd are likely to soar to 6-10 million tonnes in fiscal 2010/11 from an expected 1.5-1.7 million tonnes in the ...
Saturday, 13 February 10
RULES MAY FREE $10B OF MINING PROJECTS IN INDONESIA
The government announced on Friday that it had issued two implementing regulations for the new Mining Law that will clear the way for the developmen ...
Saturday, 13 February 10
INDONESIA OFFERS TAX INCENTIVES FOR RENEWABLE ENERGY
Indonesia is offering tax incentives to develop renewable energy projects, including geothermal energy, to cut dependency on fossil fuels, a decree ...
Friday, 12 February 10
MECHEL EYES 2010 COAL OUTPUT AT 28-29 MLN T
Russian steel and coking coal producer Mechel expects coal output to reach 28-29 million tonnes this year, returning to pre-crisis levels thanks to ...
Friday, 12 February 10
TATA POWER: QUARTERLY BLIP
Although the company’s revenues dipped in the December quarter, its long-term story is intact.
Lower power generation and realisations saw ...
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- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Xindia Steels Limited - India
- PTC India Limited - India
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Carbofer General Trading SA - India
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Petron Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Chamber of Mines of South Africa
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
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