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Friday, 05 March 10
COAL RALLY ON CHINESE DEMAND SPARKS $59 ESTIMATES
 Bloomberg reportd that, A rally that has boosted coal prices 21 percent from their lows last year may have further to go as the coldest U.S. winter in nine years and China’s record imports increase demand and drain stockpiles.
Prices will average $59.28 a ton this year, up 17 percent from $50.75 as of Feb. 19 on the New York Mercantile Exchange and 41 percent more than last year’s low in April, according to the median of 11 analyst estimates in a Bloomberg News survey. Stockpiles at utilities swelled last year after a mild summer and the economic recession reduced power demand.
China, the world’s biggest coal user, imported 16.4 million metric tons in December, a sixfold increase from a year earlier, customs data show. Record snowfall buried parts of the U.S., the second-biggest coal consumer, including Dallas and the mid- Atlantic states. The cold weather is reducing a surplus and giving producers Patriot Coal Corp., Consol Energy Inc. and Alpha Natural Resources Inc. power to negotiate higher prices.
“We’re definitely bullish for a confluence of factors,” said Jeremy Sussman, senior coal analyst at Brean Murray Carret & Co., a New York-based boutique investment bank. “We can see the light at the end of the tunnel in the U.S. The weather has definitely had an impact. The international market is front and center.”
Consol, the second-biggest U.S. coal company by market value, will jump 18 percent to $59 by the end of this year in New York trading, according to the median of 17 analyst estimates compiled by Bloomberg. Alpha, the third-biggest U.S. coal producer by output, will climb 22 percent to $57.46, analysts forecast.
Patriot Rises
Patriot rose 35 cents, or 2 percent, to $17.62, today in New York Stock Exchange composite trading, the highest price since Jan. 21. Consol added 3 cents, to $49.94. Alpha slipped 16 cents, or 0.3 percent, to $46.94. Massey Energy Co., the sixth- biggest U.S. coal producer, climbed 12 cents, or 0.3 percent, to $44.39.
Hedge funds have been buying energy producers, mining companies and airlines, a sign that managers from Louis Bacon to David Tepper are convinced the economy will accelerate. Duquesne Capital Management LLC, led by Stanley Druckenmiller, bought 6.2 percent of Massey, whose earnings are projected to double this year.
The increased U.S. and Chinese consumption prompted Michael Dudas, an analyst at Jefferies & Co. in New York, to raise his 2010 price target for coal to $70 per ton, a figure he originally forecast for 2011.
Coal Inventories
“The weather and better electricity generation have pushed stockpiles lower than people anticipated,” said Dudas, who has followed coal for a decade. “It’s really just accelerating that price.”
Utilities have 57 days worth of coal on hand, down from more than 70 days at the start of winter, according to Genscape Inc., a Louisville, Kentucky-based energy data provider.
“The pricing increases are real,” Consol Chief Operating Officer Nicholas Deiuliis said in a telephone interview. “If you look at the pricing increases we’re seeing now in regard to future sales, they have not only floored or held their bottom, they are starting to spike up.”
Coal is used to generate electricity and produce steel, making it a barometer for the economy. U.S. steel capacity utilization tumbled to 68 percent as of Feb. 15 from 91 percent in August 2008, according to the American Iron and Steel Institute, as unemployment climbed to 10 percent and consumers reduced spending 3 percent on appliances in December from a year earlier.
Prices Slide
The U.S. summer from June through August was 7 percent cooler than the same period a year earlier, reducing demand for power to run air conditioners, according to the National Oceanic and Atmospheric Administration.
Prices plunged 66 percent to $48.15 per ton at the end of 2009 from a record $143 on July 1, 2008, the steepest decline in at least eight years, according to data compiled by Bloomberg. The 17 percent gain forecast by analysts would be the largest since 2007.
Utilities amassed a record 207 million tons as demand for coal to generate electricity dropped 12 percent through Sept. 30, according to the most recent U.S. Energy Department data. Consumption for 2009 was projected to be below 1 billion tons for the first time since 1995. The government will release final figures in March.
Producers cut back output as demand slumped and that’s having an impact even as demand rises. U.S. coal production will slump about 2.8 percent this year just as exports increase 5.6 percent, the Energy Department said Feb. 10.
Record Snowfall
The 2009-2010 winter season, which began Dec. 1, is the coldest since the 2000-2001 season and ranks in the coldest third of winters in the past 115 years, according to Jeff Masters, director of meteorology for Weather Underground Inc., a private forecaster based in Ann Arbor, Michigan.
The federal government shut down for four days this month after Washington was hit with a storm that set a seasonal snow total of 54.9 inches, shattering a 110-year-old record.
For St. Louis-based Patriot, Pittsburgh-based Consol and Alpha, based in Abingdon, Virginia, the frigid conditions are providing relief.
“The cold weather is the best thing they can get right now that’s not a full economic recovery,” said Daniel Scott, an analyst at Dahlman Rose & Co. in New York. “People are no longer scared to talk about thermal coal.”
Interest Rates
The risk to forecasts for higher coal prices is a glut of natural gas in the U.S. and prospects for the economy to stumble as the Federal Reserve boosts interest rates for the first time since June 2006. The Fed last week raised the discount rate charged to banks for direct loans by a quarter point to 0.75 percent to encourage banks to borrow in private markets.
“If the economy tanks again, that changes the outlook,” according to James Rollyson, senior coal analyst at Raymond James Financial Inc. in Houston. “The economy and particularly this year natural gas prices are the variables. Coal lost market share to natural gas because we averaged $4 gas for the year.”
The U.S. relies on coal for about half of its power generation, compared with about 20 percent for gas.
Gas has to stay above $5 per million British thermal units to prevent it from being more attractive to utilities at the expense of coal. Natural gas for March delivery fell 14.9 cents, or 3 percent, to $4.895 per million Btu. Rollyson estimates that through November coal lost about 40 million tons worth of demand to gas.
Chinese Imports
China’s National Energy Administration said Jan. 25 that a coal shortage will persist through March. The country has maintained the record import pace set in December because of the country’s coldest winter in at least 50 years, according to Sutthichai Kumworachai, an analyst with KGI Group in Bangkok.
The country’s gross domestic product expanded 10.7 percent last quarter from a year earlier, the fastest pace since 2007, after the government introduced a $586 billion stimulus package that spurred energy consumption.
China’s appetite for coal led to imports from South Africa, diverting supplies from Europe and creating an opportunity for eastern U.S. coal companies such as Alpha Natural Resources, Consol and Patriot to increase sales across the Atlantic Ocean, Brean Murray Carret’s Sussman said.
This year Consol has sold almost 500,000 tons of coal into Asian markets, a 23 percent increase from the 400,000 tons that it shipped to the region for the first time last year, Dan Zajdel, a company spokesman said. As more companies follow, the exports will squeeze U.S. utilities, said Pearce Hammond, an analyst at Simmons & Co. International in Houston.
Lower Temperatures
“That’s essentially robbing utilities of coal,” Hammond said. “They don’t need it right now, but in the future they will.”
From the mid-Atlantic to the Southeast through the Gulf Coast into Texas, temperatures are averaging 4 degrees to 8 degrees below normal, said Tom Kines, a senior expert meteorologist with AccuWeather.com in State College, Pennsylvania.
“That is pretty significant,” he said.
The cold is having an impact as measured by heating-degree- day values, which have been trending higher along the East Coast and across the South, according to the National Weather Service. The value is calculated by subtracting the average daily temperature from a base of 65 degrees and is designed to show energy demand.
New York Weather
This month, New York’s heating-degree-day value is 572, or 36 greater than normal, according to the National Weather Service.
Coal prices will get a larger boost if the U.S. economy can sustain its recovery, Alpha Chief Executive Officer Kevin Crutchfield said in an interview. The world’s largest economy will grow 3 percent this year and next, according to the median estimate of 62 economists surveyed by Bloomberg News.
“That would be the best thing in the quiver, a bona-fide economic recovery, especially on the industrial side,” Crutchfield said. “If you see any type of economic stimulus and economic recovery at all, that would hasten the recovery even faster.”
Source: Bloomberg - Mario Parker
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Thursday, 18 March 10
INDONESIAN COAL PRODUCTION EXPECTED TO BEAT EARLIER FORECAST
The Jakarta Globe reported that, the government expects coal output this year to exceed its initial projection of 250 million metric tons as the dri ...
Thursday, 18 March 10
COAL PILING UP AT EAST COAST PORTS ON RAKE SHORTAGE
Business Line reported that, more than three million tonnes (mt) of imported coal are awaiting evacuation at the east coast ports of Paradip, Visakh ...
Tuesday, 16 March 10
INDONESIA ROUND VOYAGES WERE GETTING BETWEEN HIGH TEENS - BRS
Another strong week for the bulk market and rates in all segments are now back above pre-Chinese New Year levels. Atlantic volumes remain robust, an ...
Tuesday, 16 March 10
MADHUCON GETS MINING LICENSE IN INDONESIA
Business-Standard reported that, PT Madhucon Indonesia, a subsidiary of the Hyderabad-based infrastructure company Madhucon Projects Ltd, has been g ...
Monday, 15 March 10
BOB KAMANDANU ON INDONESIAS PEAK COAL PRODUCTION, ENERGY SECURITY AND EXPORTS TO INDIA
Bob Kamandanu, the chairman of Indonesian Coal Producers Association (APBI), said the country has an estimated 50 to 70 years of coal reserves.
T ...
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- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Finance - Indonesia
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Riau Bara Harum - Indonesia
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
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