Australia Newcastle thermal coal falls to USD 117 per tonne

Saturday, 29 Oct 201

Bloomberg reported that power station coal prices at Australia Newcastle port, an Asian benchmark dropped 0.2% in the week ended today.

According to the globalCOAL NEWC Index coal prices at the New South Wales port declined to USD 117.89 per ton from USD 118.10 the previous week.

Xstrata Plc the world largest exporter of power-station coal, BHP Billiton Ltd and Rio Tinto Group are among mining companies that ship coal through Newcastle.

(Sourced from Bloomberg)

South Africa coal price fall draws out Indian buying

Thu Feb 10, 2011 2:41pm GMT
LONDON (Reuters) - A fall in South African thermal coal prices to $113 a tonne this week has started to draw out Indian buyers who have been sidelined since November, Indian traders said on Thursday.
Spot coal prices topped $120 a tonne in December from $90 in October on strong Chinese spot imports and spiked again in January after disastrous Australian floods.
During this period, Indian end-users stayed firmly out of the market and relied on stockpiles, deliveries of term contract coal and cheaper coal from Indonesia instead.
India's share of South Africa's coal exports has risen from almost nothing five years ago to an average of 30 percent a month.

The participation of these buyers and the Indian traders who supply them is also a crucial element of the global spot market - their withdrawal usually triggers a fall in prices but panic-buying and bullish sentiment was overwhelming last month.
"At these prices of around $113, $114 a tonne FOB Richards Bay some more people are looking to buy South African coal now, it's not a bad price," one of India's biggest trader importers said.
"Between December and February there were no physical demand reasons for prices to up $24 and then down $20, it was all artificial," he said.
India's Binani Cement Ltd this week bought a March loading South African cargo at $114 a tonne FOB, traders said.
A few of the smaller to medium-sized cement makers are likely to issue tenders now to take advantage of falling coal prices and extremely weak freight, traders said.
Indian end-users tend to focus on the delivered cost of coal and their trader suppliers are constantly comparing the cost plus freight of South African versus Indonesian coal.
There had been some fairly active re-selling of South African cargoes back to the original suppliers in January by Indian traders who replaced these cargoes with Indonesian material but this has dried up now, Indian traders said.

"We did see some of that last month but nothing much now," one South African producer said.
"It did make sense to take cheaper Indonesian. The freight was also more stable but current South African prices are not bad and the market looks like it's going to fall further anyway," another Indian trader said.

South African coal is preferred by many Indian end-users in the sponge iron and cement sectors for its consistent quality but because the market is so price-driven, consumers will switch quickly if delivered costs rise to unacceptable levels.
Prices are expected to come under further downward pressure as Indonesian exports start to flow again following confusion over export licences.
Around 3.5 million tonnes of mostly low-grade coal was held up but this is starting to move again.(sourced:Thomson Reuters)

When will China regain its appetite for thermal coal?

SHANGHAI, Wed Feb 2, 2011, By Fayen Wong
(Reuters) - A steep discount for Chinese versus international thermal coal prices could persist through the first half of the year, as global values are bolstered by rain-led output disruptions and Chinese demand enters a seasonal lullChina has become the motor of the world coal market in the past two years after the closure of many of its own mines forced it to import. But in the past few months local prices have been relatively subdued, thanks to government crackdowns on power usage, inflation and -- so far -- the absence of a supply crisis triggered by winter.
At the same time, Australian miners are struggling to get back to normal after devastating floods decimated production, put a premium on their supplies and lifted the world market. The flood premium could linger into the second quarter, meaning a grim outlook for trading firms focused on spot sales into China.

"Thermal prices in Australia and South Africa will make it prohibitive for China to import large volumes from those countries in the first half. So we'll be seeing pretty sluggish imports over the next few months," said Bonnie Liu, a Shanghai-based analyst for Macquarie Bank.
For China's coal-hungry southern provinces, the price gap between Chinese and Australian supplies widened to $30 a tonne in mid-January - the highest in eight months -- when the worst flooding in Queensland since 1974 wreaked havoc on shipments.
Although the discount has since narrowed to about $19 a tonne, forward prices for both Australia's Newcastle and South Africa's Richard's Bay coal futures suggest the arbitrage will stay closed at least until May.

Should this be the case, trading houses such as Trafigura, EDF Trading, Glencore and Gunvor -- which thrived in 2010 selling millions of tonnes of Australian, South African or Colombian coal into China -- would have to work harder to make their dollars.
Thermal coal prices in Australia, a benchmark for Asia, are hovering at about $151.80 per tonne on a landed basis into southern China and imports from South Africa cost $148, after adjustments for coal quality. But shipping coal from China's Qinhuangdao to the south costs only $133 a tonne based on coal with heating value of 5,800 kcal/kg, net as received.
Australia and South Africa are China's second and third largest thermal coal suppliers after Indonesia. Thermal coal shipments from the two nations were 22.2 million tonnes in 2010, or about a quarter of China's total steam coal imports.

Some analysts reckon China's thermal coal imports, which averaged 7 million tonnes per month in 2010, could fall to just around 5 million tonnes from as soon as February.
"As China cuts Australian and South African imports, the only other Asian supplier China could turn to would be Indonesia. But the wet season is only expected to end in March and forecasts show rains may drag beyond June," Macquarie's Liu said.
Most Indonesian miners are also still struggling to ramp up output after unusually long rains in 2010 slowed mining and prompted some coal companies, including PT Bayan Resources (BYAN.JK), to declare force majeure on shipments.

But hopes of drier weather returning are dampened by forecasts by the country's weather bureau, which predicted the current wet season would stretch on until June.
"Chinese prices may briefly rebound as utilities rebuild their stocks, but the gap won't close. Besides, the Chinese market typically enters a seasonal demand lull after February and that means domestic prices would either stay flat or move lower," said Andrew Driscoll, an analyst at CLSA Asia-Pacific Markets, who is forecasting Shanxi blend coal to fall by 10 yuan to 765 yuan in the second quarter.

"Improved weather in the coming months would lift domestic coal production and increased hydropower could also put downward pressure on China's coal prices."
With Beijing vowing to combat inflation, trade sources said Chinese state-owned coal miners, which make up about half of coal production, are under pressure to keep down spot prices, with the government having ordered producers to keep 2011 contract prices unchanged from 2010.

RAIN, RAIN EVERWHERE
Australia's floods are expected to cut coal exports by 15 million tonnes in the period from December to March, but mining kingpin BHP Billiton (BHP.AX) (BLT.L) has warned operations could be hit for at least six more months -- suggesting that total tonnage lost could be greater.
Although the flooding has mostly affected coking coal mines, it would offer support for thermal coal prices for months to come, as miners in both Queensland and New South Wales change their production mix to sell more higher-priced coking coal, with lower grade semi-soft and PCI coal fetching more than $100 a tonne compared to thermal coal.

Although Australia's spot thermal coal prices have shed 8 percent since mid-January to $127 a tonne, analysts reckon prices may have reached a floor.
"We don't see much more downside than this, with the slow recovery in (Queensland's) Bowen Basin and high PCI and semi-soft coking coal prices keeping thermal coal supply tight for a good part of 2011," said Mark Pervan, an analyst at ANZ Bank.
In Indonesia, the world's largest thermal coal exporter, some suppliers said they have received more enquiries for shipments in the second quarter, but few have extra cargoes to offer and traders complain that maximum offers from Chinese buyers were at least $10 a tonne lower than market rates.

South African coal prices have received support from Asia's supply tightness, with heavy rainfall also slowing output. Severe rains across Colombia have caused damage to mining and transport infrastructure.
"The government meteorological bureau has forecast the rains to last until March, and possibly even until May. So we expect Colombia's export growth to be subdued this year," said Raymond Chan, a thermal coal analyst at Standard Chartered.
(Additional reporting by Fitri Wulandari and Michael Taylor in JAKARTA; Editing by Clarence Fernandez, sourced:reuters)

Xstrata 2010 coal output down 6 pct, copper steady

* Annual coal output down 6 pct to 79.9 mln tonnes
* Mined copper up 0.7 pct, copper cathode off 1.6 pct
* Coal and copper Xstrata's most profitable products
LONDON Feb 1, 2011 (Reuters) 8:03am GMT

Mining group Xstrata Plc (XTA.L) released annual production and price data on Tuesday.
Details of main products are below in tonnes, except coal in millions of tonnes.
Commodity........ Y-Y Pct(%)........Chang FY 2010......FY 2009
Coal*........................ -5.7...................... 79.9................................ 84.7
Ferrochrome........... 48........................1,165,000...................... 786,000
Copper cathode....... -1.6...................... 715,499......................... 727,050
Mined copper.......... 0.7.........................913,469..........................906,898
Mined nickel............ 6.3..........................60,670............................57,052
Zinc metal................ - 7.2..................... 765,867............................ 825,208
Zinc concentrate...... -1.0......................1,022,252.........................1,032,755
*Coal figure excludes production from Prodeco
Details of selected prices are below in dollars per tonne, except ferrochrome in cents per pound.
Commodity................... Y-Y Pct(%)........Chang FY 2010.....FY 2009
Australian thermal coal......... 6.7........................ 85.70..................80.30
S.African thermal coal........... 9.3........................ 74.40..................68.10
Americas thermal coal........... -1.2........................ 72.60..................73.50
Australian coking coal............ 41........................ 204.30..................145.00
Ferrochrome........................... 46........................ 124.30..................85.00
LME copper............................. 49........................ 7,681.................... 5,150
LME nickel............................... 48........................ 21,809.................. 14,712
LME zinc.................................. 30........................ 2,159.................... 1,659
(Reporting by Julie Crust; editing by Paul Hoskins, sourced:reuters)

Coal, Australian thermal coal Daily Price

Coal, Australian thermal coal Daily Price : 129.90

Description: Coal, Australian thermal coal, 12000- btu/pound, less than 1% sulfur, 14% ash, FOB Newcastle/Port Kembla, US$ per metric tonne

Unit: US Dollars per Metric Ton

As of: Friday, January 07, 2011, Source: globalCOAL

Month Value

Dec 2005 40.96

Jan 2006 46.27

Feb 2006 51.11

Mar 2006 53.30

Apr 2006 56.65

May 2006 56.36

Jun 2006 56.12

Jul 2006 56.52

Aug 2006 54.58

Sep 2006 50.46

Oct 2006 47.20

Nov 2006 49.29

Dec 2006 53.30

Jan 2007 54.95

Feb 2007 56.68

Mar 2007 59.34

Apr 2007 60.13

May 2007 60.00

Jun 2007 66.00

Jul 2007 72.12

Aug 2007 74.30

Sep 2007 73.33

Oct 2007 80.15

Nov 2007 90.64

Dec 2007 97.50

Jan 2008 98.30

Feb 2008 141.43

Mar 2008 126.70

Apr 2008 131.79

May 2008 142.71

Jun 2008 171.16

Jul 2008 192.86

Aug 2008 169.71

Sep 2008 160.71

Oct 2008 115.71

Nov 2008 98.84

Dec 2008 84.27

Jan 2009 85.71

Feb 2009 80.76

Mar 2009 65.36

Apr 2009 68.10

May 2009 69.11

Jun 2009 76.48

Jul 2009 79.07

Aug 2009 77.68

Sep 2009 72.47

Oct 2009 76.15

Nov 2009 84.43

Dec 2009 89.04

Jan 2010 103.93

Feb 2010 100.92

Mar 2010 101.12

Apr 2010 107.30

May 2010 107.28

Jun 2010 105.20

Jul 2010 102.84

Aug 2010 96.19

Sep 2010 101.66

Oct 2010 104.41

Nov 2010 114.81

Dec 2010 123.21

Jan 2011 129.91 * as on 07 Jan'2011

As of: Friday, January 07, 2011, Source: globalCOAL