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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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Tuesday, 09 March 10
MINING LAW OPTIMIZES SECTOR
Law No. 4 / 2009 on Mineral and Coal Mining have given a new direction for the future of mining in Indonesia, including Domestic Market Obligation, ...
Tuesday, 09 March 10
STRONG REBOUND IN ALL THE DRY BULK SEGMENTS THIS WEEK
There was a strong rebound in all the dry bulk segments this week, leading to an 18% jump in the Baltic Dry Index.
The Cape and Panamax markets s ...
Tuesday, 09 March 10
L&T POWER EYEING COAL MINES IN AUS, INDONESIA
L&T Power Development Company, a part of the Larsen & Tubro Group, plans to acquire coal mines in Australia and Indonesia, a top company off ...
Tuesday, 09 March 10
BHP AGREES SHORTER-TERM COAL DEALS WITH EUROPEAN, ASIAN CUSTOMERS
Diversified miner BHP Billiton on Monday reported that it had reached sales terms for a significant portion of its hard coking coal volumes for 2010 ...
Monday, 08 March 10
KPCL TO IMPORT 0.9 MILLION TON OF 6000 GCV COAL
COALspot.com: India's Karnataka Power Corporation Ltd is seeking to import 0.9 million metric tons of 6000 kcal/kg (adb) Gross Calorific Value stea ...
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- Sarangani Energy Corporation, Philippines
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- Formosa Plastics Group - Taiwan
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- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
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- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Economic Council, Georgia
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- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
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- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Commonwealth Bank - Australia
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- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
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- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- MS Steel International - UAE
- Baramulti Group, Indonesia
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- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
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- Goldman Sachs - Singapore
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- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
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- Larsen & Toubro Limited - India
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- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
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- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
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- Mintek Dendrill Indonesia
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- Ministry of Transport, Egypt
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- Semirara Mining Corp, Philippines
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- Bhushan Steel Limited - India
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- Karaikal Port Pvt Ltd - India
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- Petron Corporation, Philippines
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- The University of Queensland
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- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
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- Globalindo Alam Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
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- The State Trading Corporation of India Ltd
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
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- SN Aboitiz Power Inc, Philippines
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