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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, 08 March 10
CHINA SHIPPING TO CARRY MORE COAL FOR SHENHUA
Hellenic Shipping News reported that, China Shipping (Group) Company will expect to ship 40 million tons of coal for Shenhua Group in 2010, Li Shaod ...
Sunday, 07 March 10
SHIPS WERE FIXED AT AROUND US$ 16,000 PER DAY FOR TRIP VIA INDONESIA TO INDIA - CAPT. REDDY
COALspot.com: The freight market was quite buoyant this week and BDI was up by 18 pct . The Cape index up by 23.60 pct and Panamax index was up by 1 ...
Saturday, 06 March 10
ESSAR TO BUY US COAL FIRM FOR $550-600 MN
Business-Standard reported that, the Essar Group is close to buying Trinity Coal, one of the top 10 coal producers in the US, in a deal worth $550-6 ...
Friday, 05 March 10
KARNATAKA POWER SEEKS 900,000 TONS STEAMING COAL OVER 9 MONTHS
Bloomberg reported that, Karnataka Power Corp., an Indian electricity generator, is seeking to import 900,000 metric tons of steaming coal over nine ...
Thursday, 04 March 10
BANPU KEEPS JORONG OUTPUT AT 2M TONNES
Bangkok Post reported that, Banpu Plc, Asean's largest coal miner, is maintaining an output target of 2 million tonnes this year from its Jorong mi ...
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- Malabar Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Meralco Power Generation, Philippines
- Ministry of Transport, Egypt
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- The University of Queensland
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- PTC India Limited - India
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Formosa Plastics Group - Taiwan
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Marubeni Corporation - India
- Sakthi Sugars Limited - India
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
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