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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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Monday, 15 March 10
CIL BOARD CLEARS 10 PROPOSALS FOR STRATEGIC PARTNERSHIP OR JVS
Economic Times reported that, Towards achieving a global footprint, state-owned Coal India (CIL) is eyeing strategic partnership or joint ventures w ...
Sunday, 14 March 10
CHINESE COAL PRICE MAY RISE TO TRADE NEAR SPOT, MACQUARIE SAYS
Bloomberg reported that, Steel mills in China, the world’s biggest producer of the alloy, may pay more for domestic coking coal this year as d ...
Sunday, 14 March 10
THERE IS NO INDICATION OF SLOWING DOWN OF IRON ORE AND COAL IMPORTS BY CHINA - VISTAAR SINGAPORE
COALspot.com: The dry bulk freight market continued the upward trend and the BDI closed 8.14 pct this week.
The Cape index up by 10.32 pct ...
Saturday, 13 March 10
INDONESIA COAL EXPORTS DROP IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, exported 24.38 million tons in January 2010 which fell slightly to 22.89 mln ton of coal i ...
Saturday, 13 March 10
INDONESIA TELLS BUKIT ASAM TO DITCH PARTNER IN SUMATRA RAILWAY UNLESS PROJECT STARTS
The Jakarta Globe reported that, the Indonesian government has urged state-owned miner PT Tambang Batubara Bukit Asam to look for new partners to he ...
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- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- The University of Queensland
- Uttam Galva Steels Limited - India
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- MS Steel International - UAE
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Australian Commodity Traders Exchange
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Central Java Power - Indonesia
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
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