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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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Monday, 08 February 10
BLACK RIDGE MINING APPOINTS INDEPENDENT CONSULTANT
Australian-listed Black Ridge Mining has announced the appointment of David Tuit as an independent consultant to assist with the assessment of the c ...
Monday, 08 February 10
SOUTH AFRICAN EXPORT COAL RISES FOR FIRST TIME IN FOUR WEEKS
Prices for coal shipped from South Africa’s Richards Bay, the continent’s biggest export facility for the fuel, posted their first gain ...
Monday, 08 February 10
NTPC HOPES TO START ON 500-MW PROJECT IN SRI LANKA BY FEB-END
NTPC sources told Business Standard, “All formalities from our government and NTPC have been completed.
The opinion of the Sri Lankan atto ...
Sunday, 07 February 10
AN AUSTRALIAN FIRM HAS SIGNED A $60BN DEAL TO SUPPLY COAL TO CHINESE POWER STATIONS
Clive Palmer, chairman of the company, Resourcehouse, said it was Australia's "biggest ever export contract".
Under the deal, the firm ...
Saturday, 06 February 10
FREIGHT WOULD CONTINUE TO BE SOFT NEXT WEEK - VISTAAR SHIPPING
COALspot.com (Singapore): The freight market continued to soften this week including the stock markets. The main reason seems to be Chinese ne ...
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- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Economic Council, Georgia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Australian Coal Association
- The University of Queensland
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- White Energy Company Limited
- Minerals Council of Australia
- Georgia Ports Authority, United States
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
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