Week #2, week ending 15 January 2010

• globalCOAL weekly index DES ARA: 85,82 USD (RB 87,37 USD)
• UK Coal consumption soared as a spell of unusually cold weather has hit the island. A number of older Coal power stations, until recently working in restricted hours were plugged to the grid in order to provide freezing households with electricity and warmth. Analysts say of a necessity to organise a balanced and secure energy mix, which will have to include swift switch over to gas power plants and Coal plants with CCS.
• Newcastle Coal exports hit a record 8,97 Million tonnes in December 2009 on high demand from Asia.
• India Coal imports are being redirected from the Haldia port to Paradip, or even to Gangavaram or Visakhapatnam, as navigable conditions in the Hooghly river worsen. This brings disruption in railways operations, which have to tackle bottlenecks for redirected cargos.
• "Cautious optimism" appears in transportation industry for 2010 according to special Annual Review & Outlook edition of The Journal of Commerce. Global economy recovery should bring more movement of goods, however capacities will not be expanded. This may bring a sudden surge in freights if the economy recovery will proceed further than expected.
• Chinese coke exports have dropped by over 95% in 2009, totalling in 540 Thousand tonnes. Chinese government has levied 40% export tariff on coke, trying to direct more coke to the domestic market and restricting exports of pollution- and energy intensive products.
• China turns to alternative suppliers as cold winter in the country fastens Coal stock consumption and traditional Chinese suppliers, Australia and Indonesia, face weather problems. First Colombian cargoes were directed to China in January.

Week #1, week ending 8 January 2010

• globalCOAL weekly index DES ARA: 93,91 USD (RB 90,51 USD)
• Indonesia has produced 254 Million tonnes of Coal in 2009, an increase of 5,8% as compared to 2008 and exceeding the government target of 230 Million tonnes. 78% of the production was exported, mostly to consumers in Asia. The production target for 2010 is 280 million tonnes.
• China allocates over 900 Million tonnes rail capacity for 2010, out of which roughly 35 Million destined for Coal exports.
• India became 4th largest steel producer globally and may become No 2 in 2015 already. The hitherto consumption growth of 5-7 % in the last years may come even up to 10% p.a., resulting in production of 124 million tonnes by 2012. The rising trend is very likely to develop even further, as current steel consumption per capita shows 47 kg p.a. only.
• The unusually cold spell of winter in the Central Eastern Europe caused waterways around Berlin to freeze. These caused disruptions in Coal deliveries from Poland and pushed up prices for heating fuel, including gasoline and natural gas. Expected persistence of low temperatures may keep prices at high level.

Week #53, week ending 31 December 2009

globalCOAL weekly index DES ARA: 84,16 USD (RB 80,60 USD)

Week #52, week ending 24 December 2009

• globalCOAL weekly index DES ARA: 81,29 USD (RB 77,56 USD)
• 60 vessels are queueing at the Australian Newcastle port, waiting on average 13 days for loading. The queue is longest since two years and is caused by exports slowdown. 
• Coking Coal is one of most dynamically rising commodities, according to Canada's Scotiabank. As the supplies are tightening and global economy livening up, the price level is expected to move from the current 128 USD/mt to some 170 USD/mt and possibly even more.

Week #51, week ending 18 December 2009

• globalCOAL weekly index DES ARA: 78.65 USD (RB 72,69 USD)
• The Baltic Dry Index is expected to rise by 15% in 2010, reported STX Pan Ocean Co.'s representative. After a record slump of over 90 % in 2008 the index has already recovered, rising a fivefold this year. The recovery in the dry bulk market is fuelled to a great extent by an increased demand in China, as well as by gradually recovering economies in Europe and Asia.
• Rising Coal prices cause significant increase in production costs for cement works in Indian subcontinent. An almost 15% price increase of Coal in the last months has resulted in roughly 25% increase in production costs. So far the cement market is still sluggish, basing on built-up stocks.
• India has increased the volume of Coal to be imported in the current fiscal year form 25 to 28 Million tonnes, indicating doubling of this number for years 2010-2011, as domestic production can not fulfil the energy needs.

Week #50, week ending 11 December 2009

• globalCOAL weekly index DES ARA: 76,78 USD (RB 69,91 USD)
• The Baltic Dry Index is expected to rise by 15% in 2010, reported STX Pan Ocean Co.'s representative. After a record slump of over 90 % in 2008 the index has already recovered, rising a fivefold this year. The recovery in the dry bulk market is fuelled to a great extent by an increased demand in China, as well as by gradually recovering economies in Europe and Asia.
• Rising Coal prices cause significant increase in production costs for cement works in Indian subcontinent. An almost 15% price increase of Coal in the last months has resulted in roughly 25% increase in production costs. So far the cement market is still sluggish, basing on built-up stocks.
• India has increased the volume of Coal to be imported in the current fiscal year form 25 to 28 Million tonnes, indicating doubling of this number for years 2010-2011, as domestic production can not fulfil the energy needs.

Week #49, week ending 4 December 2009

• globalCOAL weekly index DES ARA: 77,40 USD (RB 69,19 USD)
• Indonesia may allow sales of domestic Coal below the government set benchmark prices, introduced to curb transfer pricing. This pondered greater flexibility for producers would allow Indonesian Coal to compete in international tenders.
• Development of Mongolian Coal resources finds vivid interest of global Coal players: BHP Billiton Ltd., Vale SA, Xstrata Plc., considering Coal production in southern part of the country, join other big names like China Shenhua Energy Co., Mitsui & Co., Peabody Energy Corp., OAO Russian Railways and Sojitz Corp., who are already in talks with Mongolian authorities. Furthermore, Rio Tinto Group and Ivanhoe Mines Ltd. are already developing a huge Oyu Tolgoi project, which might require investment of 9 Billion USD in the coming years. Mongolia, aiming at economic growth of 8,5 % in 2010, seeks to provide attractive investment conditions.
• Significantly rising domestic demand for Coal might transform Vietnam into a net Coal importer already within three years. The National Coal Industry plan foresees demand growth from the current 20 Million tonnes/y to 90 million tonnes/y in 2015. Current Vietnamese production totals 40 million tonnes/y.

Week #48, week ending 27 November 2009

• globalCOAL weekly index DES ARA: 78,12 USD (RB 68,85 USD)
• Russian Coal exports are on the rise. The most spectacular case is China, which imported 6,1 Million tonnes till September 2009, a staggering 5000% increase in comparison to the period the year before. Also exports to the UK have significantly increased (44% to 13,1 Million tonnes). Despite Japan’s ailing Coal imports Russia remained a steady supply at the level of 6 Million tonnes. This is a result of Japan’s search for diversification of Australian supplies.
• Australian company Windy Knob Resources has acquired 100% shares in Mongolian Ovoot Coking Coal project, Khuvsgui Province. Initial exploration indicated abundant resources of hard Coking Coal, which might strengthen Mongolian presence on the international Coal market.