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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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Saturday, 13 March 10
OPTIMUM COAL AIMS TO RAISE R1,6 BILLION IN LISTING
All Africa reported that, COAL mining and exploration company Optimum Coal yesterday announced plans to list on the JSE at the end of the month ...
Thursday, 11 March 10
THE INDIAN MARKET WAS A BIT QUIET BUT STILL FIRM - FEARNLEYS AS
Handy - Atlantic activity has kept its firm tendency throughout the week for handies, with Atlantic RV´s fixed in the USD.16000 region. With s ...
Thursday, 11 March 10
COAL PRICES SET TO RISE AMID CONFUSION OVER QUARTERLY SYSTEM
Trading room reported that, Coal prices are tipped to rise in coming months amid constrained supply and ongoing Chinese demand, and analysts are con ...
Wednesday, 10 March 10
PROTECTED FORESTS NOW UP FOR GRABS FOR MINING
The Jakarta Post reported that, the government has just issued two new regulations on forests, which could allow protected forests to be used for co ...
Tuesday, 09 March 10
REGULATION NO.23 OF 2010 CONCERNING IMPLEMENTATION OF NEW MINING LAW, PROVIDES MORE CLARITY ON OBTAINING A IUP
COALspot.com: Indonesian government has recently issued another regulation related to Law number 4 of 2009 concerning mineral and coal mining. Two r ...
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- ASAPP Information Group - India
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- The University of Queensland
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Barasentosa Lestari - Indonesia
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Central Electricity Authority - India
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- PTC India Limited - India
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
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