HMS Weekly Coal and Energy Resources News
Week #25, week ending 25 June 2010
- globalCOAL weekly index DES ARA: 91.14 USD (RB 90.68 USD)
- Semi soft coking Coal has settled at 172 USD/mt FOB Australian ports (New South Wales, mostly Newcastle) for Q2. Biggest producers, who provide 4.5 Millon tonnes were expecting a price increase of 10% for Q1 prices (167USD/mt), yet the market accepted only 5% increase.
- Russian producer Belon plans to significantly expand its coking Coal production. Belon won a bid on a new mine of high volatile coking Coal, which deposit is estimated for more than 120 Million tonnes. After the Raspadskaya mine accident Russia is experiencing scarcity of coking Coal.
- Colombia is boosting its exports to India making use of high SA prices and growing Indian imports demand. Thus Colombia may keep on increasing its exports to India, which up to recently have been very rare.
Source: globalCoal, en.sxcoal.com, Steel business briefing, Bloomberg.
Week #24, week ending 18 June 2010
- globalCOAL weekly index DES ARA: 95.02 USD (RB 93.30 USD)
- Japanese industrial buyers were reported to have purchased 2-3 Million mts of Indonesian Coal on short term basis (six-months term contracts instead of traditionally used yearly contracts) to make use of lower prices. At the same time strong demand in China and India and rainy weather in Indonesia make the prices of Indonesian Coal to firm up.
- Chinese coking Coal prices eased slightly on high domestic stocks and falling iron and steel prices. Platts assessed CFR price Qingdao, China at 207USD/mt, a price decrease by 7 USD/mt for prime HCC. Chinese prime HCC is believed to be 205-210 USD/mt delivered. At the same time Indian demand for Coking Coal is still firm: Australian prime HCC was reported at 225-230 USD/mt FOB and around 255USD/mt delivered.
- Semi-Soft Coking Coal prices have settled at 172 USD/mt FOB (primarily) Newcastle. Current developments indicate that market shows more interest in non-premium Coking Coal.
Source: globalCoal, Xinhua Infolink, Platts, Energy Publishing.
Week #23, week ending 11 June 2010
- globalCOAL weekly index DES ARA: 96.02 USD (RB 93.43 USD)
- SUEK, Russian largest Coal exporter has announced shipments delays to Europe, as it is reorganizing its equipment at the Kotinskaya mine. As most of other Russian producers SUEK has committed most of its 2010 production and has scarcely any volumes left.
- Rio Tinto is ready to invest heavily in Indian mining industry. The company is having talks with major Coal companies from India, including Essar and Coal of India Limited, to carry out mining in India or to partner with Indian companies for mining operations in other prospective markets, like Brazil or Canada. Rio Tinto's financial officer Alan Davies has declared, that India is on the priority list of the company and that it is ready to spend billions in mining.
- POSCO has reached its agreement with two Australian Coal producers on quarterly pricing of its low vol PCI Coal, settling them in the range of 175-180 USD/mt, 85% of the Hard Coking Coal (HCC) price.
Source: globalCoal, Energy Publishing, en.sxcoal.com, Energy Publishing.
Week #22, week ending 4 June 2010
- globalCOAL weekly index DES ARA: 90.67 USD (RB 92.37 USD)
- STX Corporation, a large South Korean shipping and shipbuilding company, is considering to take up 10% in a Coal production consortium in Australia's Queensland. STX wants in this way diversify its portfolio and engage in energy exploration and plant construction.
- Indonesia's new environmental regulations, considering imposition of a moratorium on deforestation, may bring uncertainty and hamper Indonesian Coal industry. Most of Coal production in Indonesia is being carried out by open-cast mining, and new regulations may hamper development of new mines and cast uncertainty over existing ones. Furthermore, the new law proposal gives anyone possibility to complain about land degradation, which may lead to a criminal punishment. Indonesia is one of global major producers of Coal (320 Million mts forecast for 2010) and India's hunger for Coal as well as growing domestic demand requires further capacity expansion.
- Deutsche Bank has upgraded its earning guidance for main Coal producers, including BHP Billiton and Rio Tinto. The Coal team of the Deutsche Bank expects prices to return to approximately 120 USD/mt in 2012.
Source: globalCoal, The Wall Street Journal, Bloomberg, The Australian.
Week #21, week ending 28 May 2010
- globalCOAL weekly index DES ARA: 91.97 USD (RB 93.05 USD)
- India may need to import Steam Coal form the USA to satiate its enormous energy appetite. India's Coal Minister, Sriprakash Jaiswal, has informed that India may look for JVs to secure its sourcing. Since 2009 imports of metallurgical Coal from USA to India were quite common, yet no Steam Coal so far. India is also looking to form JVs with Australia and Indonesia.
- Coking Coal in spot markets seems to have stabilised at around 215 USD/mt FOB Queensland, Australia. Decrease in steel prices and ample supplies are easing off the pressure on Coking Coal.
- India is considering whether private companies should be allowed to own commercial Coal mines, a step which is believed might boost output in this Coal-hungry country. The mining industry is in the state hand and private companies are allowed to produce Coal for their own needs only (e.g. steel companies).
Source: globalCoal, MarketWatch, Platts, Reuters.
Week #20, week ending 21 May 2010
- globalCOAL weekly index DES ARA: 86.89 USD (RB 87.76 USD)
- Transnet has declared force majeure on the rail line connecting Witbank and RBTC as the mediation attempts with the unions failed. Nevertheless due to accumulated stocks the declaration should not affect the Coal shipments unless the strike lasts for more than 2 weeks.
- Russia's energy official Igor Sechin has summoned Russian producers to supply coking Coal to local markets after the Raspadskaya catastrophe. Attractive prices on the domestic market are likely to keep domestic customers supplied. With the main mine out of production and two smaller mines functioning Raspadskaya had to lower its production capacity from 950kt to 350kt of semi hard coking Coal per month and 255kt from 760kt of concentrate.
- SUEK, Russia's largest Coal producer is planning to sell 10% of its stock to fund expansion plans.
Source: globalCoal, miningmx, Reuters, Bloomberg.
Week #19, week ending 14 May 2010
- globalCOAL weekly index DES ARA: 89.60 USD (RB 89.25 USD)
- Prophecy Resources, a Canadian Coal developer, has commissioned at Leighton Asia construction of infrastructure, leasing of equpment and leasing operations at Ulaan Ovoo Coal project in Northern Mongolia. By December 2010 the mine should reach capacity of 100kt/m, while target for 2011 is 2 Million mts of low ash low sulphur 5,200 kcal/kg NAR Steam Coal.
- Finland has opened a 240 Million EUR wood burning plant at UPM's Kaukas mill, with the capacity of 125 MW electricity and 385 MW thermal power, thus increasing its biomass energy production capacity and confirming its leader position together with Sweden. The new plant will be fired mainly with wood, bark, branches, stumps and peat.
Source: globalCoal, Energy Publishing, Argus Media.
Week #18, week ending 7 May 2010
- globalCOAL weekly index DES ARA: 90.29 USD (RB 94.67 USD)
- Port Waratah Coal Services (PWCS), owned by major Coal producers in Australia, is pushing ahead with construction of another Coal terminal to handle projected doubling of Coal exports within the next five years. Active investment in Coal export facilities in Australia is necessary to keep pace with steadily growing electricity production forecasts in Asia.
- South Korea is considering investment in Coal development projects in Africa. Korea Resources Corp. has signed a MoU with SA Continental Coal and a feasibility study is expected in three months.
- India's Minister of State for Coal has announced that after last national inventory Coal resources were estimated at 267 Billion mts, out of which 106 Billion mts are proven resources. This domestic resources should be able to cover projected national Coal demand. So far the country is resorting to imports of both coking Coal and Steam Coal.
Source: globalCoal, en.sxcoal.com, Dow Jones.
