Supras Ex Richards Bay Coal Terminal to India hovering at $ 25 - 27.00 PMT - FEARNBULK

Friday, 01 April 11

Handy

Atlantic markets remain stable with more activity from the Black Sea to FEast paying in the mid 20´s on Supras. The USG remains firm paying in the mid 20´s for trips into the Med and low/mid 30´s for trips FE.

Outlook: stable. The Pacific market is still weak; the signs of weakening are lack of fresh enquiries and less trading activities. Indian activities are also very slow. Supras on WC India are seeing high teens for trip to China with freight levels hovering between usd 20 pmt. Supras ex Richards bay coal terminal/ India hovering at usd 25/27.00 pmt. Ex Red Sea to India handymax tonnages are seeing mid/high 20´s.

Panamax
With few fresh cargoes entering the market, the rates declined marginally this week. TA´s fixed in average around USD 16k, which is a tick down from last week. South America and coal from US kept the market going. In the Pacific the rates hovered around USD 16500. However rumors stated that Japan would increase their coal import, due to lack of nuclear energy. The ballasters from the Pacific and Indian Ocean obtained decent numbers, around USD 16-17k daily, which was in line with the short period market.

Capesize
Activity is up but same has yet to be reflected in rate levels as this segment remains generally overtonnaged. The main WAust/China ore trade is erratic in volume but stable in value at usd 7.35-45 pmt - equivalent to less than opex. Nuclear concerns have given some support to Atlantic coal activity/ expectations, with resultant transatlantic levels maintained at some usd 12250 and fronthaul also unchanged at around usd 23350. With an inverted forward curve, period activity is limited to 180kdwt/blt 2009 spot FEast done for 12 mos at usd 16k, 177kdwt/blt 2004 China ppt done for 4-6 mos at usd 15500 and 174kdwt/blt 2007 said to be done for 2 yrs at around usd 17500. source:Fearnbulk

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Power, coal, carbon prices rise on German election

Mon Mar 28, 2011 12:13pm GMT
* 2012 power prices at highest since late 2008
* Carbon, coal gain 2 pct
* Market expects oldest nuclear reactors to stay offline

By Karolin Schaps and Henning Gloystein

LONDON, March 28 (Reuters) - European energy prices jumped on Monday as a key Green Party victory in German state elections underlined concerns that widespread anti-nuclear sentiment may permanently shut Germany's oldest reactors.

German baseload electricity contract for 2012 rose BY1DE-1Y to its highest since before the global financial crisis slashed power prices in late 2008, while the price of coal for delivery into Europe next year ICPAP2YZ2 and for permits to emit climate-warming carbon both rose nearly 2 percent. CFI2Zc1

"The power market is taking the view that certain plants are not coming back. If there is a hard, fast decision (on keeping reactors offline) prices would go in an upwards trend," said Martin Young, Executive Director for Equities Research at investment bank Nomura.

The surge in prices comes after Japan's nuclear disaster prompted Chancellor Angela Merkel to impose a three-month moratorium on her coalition government's decision to extend the lifetime of Germany's nuclear reactors, which helped steer the anti-nuclear Greens to control of Baden-Wuerttemberg at the weekend elections.

Seven nuclear reactors shut down following the moratorium in place until at least June, but German power traders believe the loss in political support for nuclear power in Baden-Wuerttemberg will lead to the permanent shutdown of the two oldest reactors located there -- Philippsburg I and Neckarwestheim I -- and other shutdowns will follow quickly.

"I think this now increases the likelihood that Neckarwestheim I and Philippsburg I do not come back after the moratorium and that the other units are phased out quickly," a London-based energy analyst at an investment bank said.

Environment minister Norbert Roettgen, a close Merkel ally, fuelled the debate on Monday as he called for a quicker shutdown of Germany's nuclear reactors. [ID:nLDE72R0JT]

BULLISH FOR CARBON, POWER

The benchmark contract for EU Allowances CFI2Zc1 rose as high as 17.35 euros a tonne early on Monday, the highest in eight days, while coal prices for year-ahead delivery rose above $130 per tonne, maintaining highs seen last week.

"Getting rid of old nuclear plants means plants will run more coal and gas. That means around 70 million tonnes of extra carbon dioxide will be emitted and carbon is up on this prospect for now. The question is how much is this worth in terms of additional carbon price?" said Emmanuel Fages, analyst at Societe Generale/orbeo.

European Energy Commissioner Guenther Oettinger, who before his position in Brussels was Prime Minister of the state of Baden-Wuerttemberg, also supported the view that coal will act as a substitute to nuclear in Germany.
UTILITIES, RENEWABLES GAIN

Share prices in German utilities rose on the back of high gains in power prices and the prospect that utilities may be able to see higher returns from coal and gas plants to substitute the loss in nuclear capacity. Shares in utility RWE (RWEG.DE: Quote) initially fell on Monday but rebounded later to rise 0.43 percent above Friday's close to 44.88 euro at 1055 GMT on Monday, while shares in E.ON (EONGn.DE: Quote) were down 0.16 percent.

Renewable energy shares in Germany continued their strong gains and the OekoDAX , one of the country's biggest renewable stocks was up 6.5 percent on Monday, while the S&P Global Clean Energy Index .SPGTCLEE was up 1.9 percent.

Renewable stocks have soared since Japan's March 11 earthquake and tsunami which damaged nuclear power reactors and caused radioactive leaks.

The global backlash against nuclear power has boosted the outlook for renewable energy as governments ponder their nuclear options.

The election outcome in Baden-Wuerttemberg on Sunday is likely to mean an end to the 58 year long rule in the state of chancellor Angela Merkel's conservative CDU party.

This is likely to leave the anti-nuclear Green Party in control of the utility EnBW (EBKG.DE: Quote), which operates four nuclear reactors, two each at Neckarwestheim and Philippsburg.

It would be the first time that the Green Party has headed a state government in Germany.

The CDU's pro-nuclear policies, which included buying a majority stake in EnBW last year, were punished by Baden-Wuerttemberg voters after the nuclear crisis in Japan.

The opposition Greens claimed about around 25 percent of the vote and will likely form a coalition with the Social Democrats, who took around 23 percent of the votes.

BHP outlines $9.5 bln expansion plans in iron ore, coal

Thu Mar 24, 2011 10:53pm GMT

* $6.6 bln invested in WA iron ore operations

* $2.5 bln invested in Bowen Basin coal site

* $400 mln invested in Hunter Valley coal site (Adds background, details)

LONDON/MELBOURNE, March 25 (Reuters) - BHP Billiton said it has approved $9.5 billion of capital investments to expand Australian iron ore and coal mining projects, in the first details the global miner has given of a planned $80 billion in investments over five years.

The world's biggest miner has decided to expand its own operations and infrastructure rather than chase ambitious takeovers, after three failed takeover bids, as it scrambles to meet rising demand from Asia.

For a factbox on investments

The top global miner said it would invest $6.6 billion in a total investment of $7.4 billion to continue production growth in the company's western Australian iron ore operations.

Investment will include the development of the Jimblebar mine, rail links and additional berths and ship loaders at its Port Hedland site.

BHP said it had also approved three key metallurgical coal projects at its Bowen Basin site in Queensland.

BHP will put in $2.5 billion of the total $5 billion investment, which will see the new Daunia mine developed, its Broadmeadow mine's life extended by 21 years and the stage three expansion of its Hay Point coal terminal.

In a third statement, the company said it had approved a $400 million investment to expand Hunter Valley Energy Coal in New South Wales with a view to increasing production.

The three announcements are the first in the company's planned $80 billion expansion plans announced last month, as it posted a near doubling of first-half profits to $10.7 billion.

BHP has ditched three major deals in the past three years, including its $39 billion bid for top global fertiliser maker Potash Corp last year, mainly on regulatory concerns.

Shares in the company closed up 1.4 percent in London, before the company's statements were issued.

Wescoal and contractor trade blame

Sutha Civils lays fraud charge against Wescoal, threatens to launch liquidation process.

Mar15,2011 07:16:15 AM
By Allan Seccombe, Business Day

IN THE matter of Wescoal versus its contractor, Sutha Civils, both parties are at opposite poles, with Sutha laying a complaint with the police against the JSE-listed coal producer’s subsidiary, Wescoal Mining, which denies any wrongdoing and blames the action on "malicious intent".

Sutha will today file a liquidation process in the South Gauteng High Court, said Sutha CEO Nico Swart, who says he will meet members of the Commercial Crimes Unit to flesh out his allegations and give documentary proof. Mr Swart is clear about the root of his allegation made against Wescoal and its Khanyisa colliery. "There is no coal," he said yesterday .

He said Sutha was contracted to do open-cast mining at Khanyisa and were given co-ordinates by the mine’s geologist. However, when the site was opened, the targeted coal was not there, he said.

"This is not my problem if there is no coal," he said. "The tonnages mined from the box cuts are not what they told investors.

"I have my documents, contracts and drawings showing where places were opened up, but there was no coal. I can show these to investors, the police. I can show the coal is not there."

Wescoal Holdings CEO Andre Boje dismissed the claim with unusual bluntness. "I categorically deny that claim. Furthermore, I’m not going to debate with these hooligans in the media. They are making unfounded and scary allegations."

Wescoal and its lawyers had yet to see the documentary proof Mr Swart claimed to have, Mr Boje said. "Among a number of unsubstantiated claims, Sutha has now accused Wescoal of overstating tonnages mined at Khanyisa. We categorically deny this. We are a company with integrity and ethical principles and in this case, a target of malicious intent."

Wescoal’s counterallegation is that Sutha was mining outside the area in some cases.

Wescoal shares fell to 91c yesterday before staging a recovery to end back at Friday’s price of 99c.

Wescoal told the market via a release on Sens that it had begun its first investigation into irregularities in the Sutha contract within five months of Sutha being hired to mine the west pit at Khanyisa.

"No meaningful explanations were forthcoming from Sutha and the situation was exacerbated, until December 2010 when Wescoal removed Sutha from the Khanysia property and operation in entirety," the Sens statement said.

Mr Swart said there may be a second party to the liquidation proceedings. Mr Boje said he was aware of no other claims against Wescoal.

Khanyisa is the first operating mine in the group and marked its shift from being a coal trading firm to an integrated producer. It is an open-cast mine near Kendal in Mp umalanga and has an estimated reserve of 2,7-million tons.

In April to September last year , Khanyisa produced 887000 tons of coal, of which 546000 tons was supplied to Eskom. Wescoal said that the mine should reach its stated target of 1,2-million tons of run-of-mine coal by the financial year-end on March 31, and it is forecast to have supplied Eskom with 900000 tons in the same period.

Coal of Africa debt restructure

CEO says company will not go back to the market to keep wheels rolling

Thu, Mar 17, 2011 06:53:32 AM
By Allan Seccombe, Business Day

COAL of Africa (CoAL) will announce details of a new debt structure in coming days ahead of a $20m debt repayment to JPMorgan on March 24, plus raise extra cash to give the company "headroom" for its other projects, CEO John Wallington said yesterday.

CoAL has seen its cash reserves dwindle to A23m ($22,6m) by the end of December last year from A$101m at the end of June last year and the group has put in strict cash control measures to rein in spending. Work on the new debt facilities are about 98% complete and are awaiting final signatures, Mr Wallington said.

"If it’s a rollover (of the $20m debt) or replacing it with another facility, one of them will happen. It’s in place. With that facility in place it will also soothe the unfortunate market fears that this company will have to go back to the market to keep the wheels rolling, which it won’t have to do," he said.

A combination of cost controls, revenue increases from rising coal prices, and the new debt facility will enable CoAL to continue "without any issues for the rest of the year", he said.

CoAL would consider an equity issue only as one of a number of fund-raising mechanisms to raise more than $500m to build its Makhado coking coal project in Limpopo, he said. The hurdles that need to be cleared first are securing mining rights and completing a definitive feasibility study after the testing of 4400 tons of coal at ArcelorMittal’s Vanderbijl park steel mill.

The new debt package will be more than $20m, Mr Wallington said. "We want to give ourselves the headroom to cater for bringing Vele back into production. That will need cash for two or three months until the coal revenues start flowing.

"We also need cash to continue exploration and complete the Makhado feasibility," he said.

CoAL has spent about R600m on Vele, a coking coal mine near the Mapungubwe national heritage site, but the mine was stopped in its tracks just months before commissioning. It received a compliance notice from the Department of Environmental Affairs in August last year.

CoAL had adhered to all the requirements in the notice as well as all legislative matters, Mr Wallington said. The mine could resume "imminently", he said, without being drawn on any more specific time line.

"There is a campaign for the government to have a clearer policy about mining and industrial development in areas that are considered environmentally sensitive. Vele has become a test case for that," he said.

CoAL needs to spend R80m more to complete the mine, which will produce up to a million tons a year of soft to medium-hard coking coal suitable for steel mills. It may produce only half that to start with because it has been unable to secure agreements with Transnet on rail allocation, he said.

Implications of the Japan Crisis on steel, coal, shipping industry

Mar16, 2011

In the aftermath of the devastating earthquake that has hit Japan, fears are growing over the potential for radiation leaks from damaged nuclear plants. Equity markets have been hit while FFA prices have also sustained significant losses. With the situation still unfolding, the longer term impact of the disaster on commodity markets is unclear, although some initial conclusions can be drawn.

In the short term, shipping has been disrupted with 13 ports reported by Reuters to have closed, with some of these unlikely to be operational for several months or even years. Initial assessments by Macquarie and the Steel Index put production at five large steel mills in the worst-affected region at risk, accounting for 15-18 million tonnes (Mt) of annualized steel production capacity. That could potentially remove around 20-25 Mt of iron ore and 9-10 Mt of coking coal demand.

In the longer term, reconstruction should boost demand for steel with potential for significant increases in raw material imports. Whether the additional steel demand is met entirely by Japanese production or partially by China, Korea and/or Taiwan, the overall effect should be a boost to iron ore and coking coal imports into the region. Capesize vessel demand would therefore be the biggest beneficiary, with the Panamax sector boosted by extra coking coal demand alongside additional Handysize and Supramax employment on steel products, timber and grain trades. Should additional cargoes be required into China, this would entail more spot market chartering activity, in contrast to Japan’s traditional reliance on longer term freight contracts.

Meanwhile the nuclear crisis has led to rolling blackouts. Out of Japan’s 54 nuclear reactors, 11 are reported closed. The Fukushima Daiichi nuclear plant has so far suffered explosions at three of its reactors and it will almost certainly be decommissioned once the crisis is over. Japan depends on nuclear power for almost a third of its total energy needs. Recent parallels can be drawn with the closure of the Kashiwazaki-Kariwa nuclear plant for 21 months after the 2007 earthquake in Niigata prefecture and, perhaps more significantly, the temporary shutdown in 2003 of 17 nuclear power stations for emergency safety inspections after it was revealed that inspection reports had been falsified.

The 2003 closures led to an increased reliance on both oil and coal-fired power generation. There was an unexpected spike in Japan’s steam coal imports (including anthracite) in July and August 2003 to more than 15 Mt per month compared to an average of 14 Mt per month during the 1h03. This was a key factor in causing the chronic shortage of dry bulk tonnage at that time that led to the record-breaking surge in freight rates.

The rolling programme of emergency inspections in the months that followed led to a very gradual reopening of nuclear plants, which helped to ensure that Japan’s steam coal demand grew strongly. Combined steam coal and anthracite imports jumped from 112.0 Mt in 2003 to 123.6 Mt in 2004. Improved economic conditions in 2010 resulted in the annual import total rising by 14.1 Mt over 2009 to 131.2 Mt. Beyond the inevitable short-term disruptions, there is potential for further strong rises in steam coal demand. This could be particularly significant in the longer term if the latest tragic developments cause a rethink in Japan of the viability of nuclear generation as a key part of the country’s energy mix. (By Marinelink)

All Japanese ports shut after huge quake - shippers

Fri Mar 11, 2011 8:52am GMT

SINGAPORE, March 11 (Reuters) - All Japanese ports have closed, with discharging operations halted, after the country was hit on Friday by an 8.9 magnitude quake and tsunami, shippers said.

The biggest earthquake to hit Japan in 140 years struck the northeast coast, triggering a 10-metre tsunami that swept away everything in its path, including houses, cars and farm buildings on fires.

"It's a big mess. All discharge operations are suspended in the area," said a shipbroker.

TV footage showed at least one large panamax vessel, which typically carries 80,000 tonnes of coal, iron ore and grains, grounded in northern Japan due to the tsunami, a second Tokyo-based shipbroker said.

"Most or all coal stocks will be washed out at many of the coal fired power plants," he said.

"Ports will be closed at least for a short time period until damage assessments can take place."

Shipbrokers expected freight rates to rise in the short-term as Japanese power plants restock their coal inventories and steel companies import more iron ore as part of the rebuilding process.

A tsunami warning has been extended to the whole of the Pacific basin, except for mainland United States and Canada, following the earthquake in Japan, NOAA's National Weather Service said on Friday.

The warning includes Mexico and Central and South American countries on the Pacific, NOAA's Pacific Tsunami Warning Center said. (Reporting by Randy Fabi and Luke Pachymuthu Editing by Ed Lane,Thomson Reuters)

Indonesian miners say value added law will hurt in the long run - The Jakarta Globe

Tue,March08, 2011

The Jakarta Globe reported that, Government plans to require miners to give added value to their exported commodities could end up costing the country income, a mining association official said on Monday.

Priyo Pribadi Sumarno, an executive director at the Indonesian Mining Association, said the domestic market for minerals such as tin, gold, copper and nickel was relatively small compared to the export market.

“We support the idea of giving added value to our commodities, but requiring these added values as a requirement for export will be more problematic and it will reduce export revenue,” he said.

A 2009 mining law requires miners to upgrade their mineral commodities, with mineral producers needing to comply by 2014 and coal producers by 2016.

Priyo said the law would require local miners to process their commodities before exporting them. Companies would export ferro nickel instead of raw nickel, for example, while copper would be required to have 99 percent metal content and coal at least 5,600 calories.

Exports of tin, Indonesia’s top commodity, would have to be 99.85 percent metal.

To meet that requirement, he said, companies would have to invest more in technology by building or upgrading their smelters. A simple smelter could cost about $50 million, while a more advanced smelter could cost at least $500 million.

“The government’s attempt to boost the downstream mineral sector might cost the miners themselves,” Priyo said. “Also, the basis for these added-value requirements is still unclear and we’re pessimistic that the domestic market can absorb most of these commodities.

“I don’t think the regulation is necessary for coal, which accounts for more than 80 percent of our mineral exports, because coal already has its own domestic market obligation.”

According to data from the Central Statistics Agency (BPS), Indonesia’s mining sector was worth $26.67 billion last year, making up 17 percent of total exports.

Priyo said his association would ask the government to review the value-added law and recommend that the plan be implemented in phases while miners upgraded their downstream capability.

“The domestic demand for minerals is too small to absorb the potential excess of commodities,” he said. “If this regulation is enforced, big companies like Newmont, Aneka Tambang and Inco will be the ones affected the most.”

Gold miner Newmont Nusa Tenggara, a local unit of the giant US firm, said complying with the value-added law could prove to be problematic.

“We understand the spirit of the law, but our studies have shown that building a smelter is not economically feasible,” Kasan Mulyono, NNT’s spokesman, told the Jakarta Globe on Monday.

“Currently, there is a global shortage on smelter supplies as many smelters are operating under their capacity.”

Bambang Gatot Ariyono, the director of mining development at the Energy Ministry, was unavailable for comment. (By Faisal Maliki Baskoro, The Jakarta Globe)

Coal of Africa says NOMR application has been accepted

Thursday, 03 Mar 2011

Coal of Africa said that it will begin the rigorous process to get the final granting of a new order mining right for the Makhado coking coal project.

The company revealed that it has now received an acceptance letter from South Africa's department of mineral resources, following its NOMR application in January 2011. The application must now be processed before the NOMR can be granted. On AIM the shares gained around 5% in opening deals, rising to 96.75 pence a share.

CZA highlighted that it is currently working on extensive economic, social and environmental impact studies as part of a detailed Environmental Management Program.

It expects to start work on the Makhado project's detailed design phase once the definitive feasibility study has been finalized and approved slated for the June quarter.

Makhado is one of the company’s four main assets alongside the Woestalleen Colliery, the Mooiplaats thermal coal mine and the Vele coking coal project. The coking coal project is located in Soutpansberg, 60 kilometers from Musina in the Limpopo Province, close to Rio Tinto's Chapudi project and covers an area of more than 23,000 hectares. It is expected to start production in 2013.(sourced :proactiveinvestors.co.uk)

Tags :Vale coking coal project, Rio Tinto's Chapudi project, Mooiplaats thermal coal mine

Macroeconomic indicators - Index of six core industries for January 2011

Wednesday, 02 Mar 2011
The Index of Six core industries having a combined weight of 26.7% in the Index of Industrial Production with base 1993-94 stood at 295.6 (provisional) in January 2011 and registered a growth of 7.1% (provisional) compared to 9.8% registered in January 2010. During April-January 2010-11, six core industries registered a growth of 5.6% (provisional) as against 5.5% during the corresponding period of the previous year.
Crude Oil
Crude Oil production (weight of 4.17% in the IIP) registered a growth of 10.8% (provisional) in January 2011 compared to a growth rate of 9.8% in January 2010. The Crude Oil production registered a growth of 11.9% (provisional) during April to January 2010-11 compared to (-) 0.1% during the same period of 2009-10.
Petroleum Refinery Products
Petroleum refinery production (weight of 2.00% in the IIP) registered a growth of 8.7% (provisional) in January 2011 compared to growth of 3.8% in January 2010. The Petroleum refinery production registered a growth of 2.4% (provisional) during April to January 2010-11 compared to (-) 0.5% during the same period of 2009-10.
Coal
Coal production (weight of 3.2% in the IIP) registered a growth of (-) 1.2% (provisional) in January 2011 compared to growth rate of 5.4% in January 2010. Coal production grew by 0.8% (provisional) during April to January 2010-11 compared to an increase of 8.0% during the same period of 2009-10.
Electricity
Electricity generation (weight of 10.17% in the IIP) registered a growth of 9.3 % (provisional) in January 2011 compared to growth rate of 6.4% in January 2010. Electricity generation grew by 5.0% (provisional) during April to January 2010-11 compared to 5.9% during the same period of 2009-10.
Cement
Cement production (weight of 1.99% in the IIP) registered a growth of 1.8% (provisional) in January 2011 compared to 12.4% in January 2010. Cement Production grew by 4.1% (provisional) during April-January 2010-11 compared to an increase of 11.1% during the same period of 2009-10.
Finished (carbon) steel
Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of 8.2% (provisional) in January 2011 compared to 16.8% (estimated) in January 2010. Finished (carbon) Steel production grew by 7.8% (provisional) during April-January 2010-11 compared to an increase of 5.7% during the same period of 2009-10.

Xinjiang to import coking coal from Mongolia

Sunday, 27 Feb 2011 China coal Times

Far western province Xinjiang is seeking to boost coking coal imports from Mongolia to meet demand from its rapidly expanding steel sector. The region plans to raise crude steel capacity from roughly 7 million tonnes per year now to more than 22 million tonnes per year by 2015 however local deposit of coking coal resources is scarce, compared with huge steam coal reserves estimated at more than 2 trillion tonnes.

In Qinhe county of Xinjiang, local authorities are pushing forward the construction of a 1 million tonnes per year coking project with necessary washing facilities by 2015. The project is located at border crossing Takeshiken which will be a major outlet of Mongolian products after a series of infrastructure upgrading complete in the next few years. This includes the construction of railway and road projects that funnel coal and ore products into factories in Xinjiang, such as Bayi Steel a unit under Baosteel.

The border crossing Takeshiken was fully opened on January 13, before which it was closed between December and April. Statistics show Xinjiang produced 45 million tonnes of coal in 2008 of which 3.9 million tonnes was coking coal with hard coking coal only accounting for 0.67million tonnes.

Declare coal an essential commodity

Feb 25, 2011, 03.00 am IST by TNN

NEW DELHI: A parliamentary committee has asked the government to include coal in the Essential Commodities Act (ECA) to control its pilferage while asking the ministry of coal to prepare a comprehensive document having details of human lives lost, environmental degradation and resultant loss to the exchequer due to illegal mining.

Coal was removed from the ECA earlier through an amendment. Now, the committee wants Centre to control its production, supply and distribution to stop illegal mining and pilferage.

A study carried out by the Jharkhand government with the help of Indian School of Mines, Dhanbad, estimated loss to coal companies to the tune of Rs 106 crore annually and to the exchequer of about Rs 34 crore a year.

In a report given to Parliament on Thursday, the parliamentary standing committee on coal and steel has said a joint inter-state intelligence and action force should be constituted to combat the problem of illegal mining. A task force in each state under the supervision of the deputy commissioner and superintendent of police of the concerned area has also been mooted.

Tags: supply and distribution, illegal mining, pilferage, Jharkhand, raw material

China bans hoarding of oil, coal to cool prices

Feb23,2011 By AP

China is banning hoarding of oil, coal and other key commodities, seeking to ensure supplies and cool prices that have surged despite repeated moves to curb inflation.

The government planning agency, in comments published Tuesday, says provinces are forbidden to limit shipments of coal beyond their borders and are required to ensure stable supplies.

Local authorities were ordered to crack down on hoarding, bogus bids meant to drive prices higher, and other illegal practices.

China is trying to cool inflation that surged to a 25-month high in October. Authorities say soaring food prices are mainly to blame, but costs for fuel and other necessities have also jumped, as supplies have run short.

ANALYSIS-Small ships to unlock rate boon for bulk owners

Feb8, 2011 17:32 EST

By Krishna N Das and Jonathan Saul
BANGALORE/LONDON, Feb8(Reuters) – Dry cargo shippers with smaller vessels are shifting to more-risk, more-reward spot markets, eyeing rising demand for sugar and grains — commodities well suited to versatile supramax and handysize ships.
Ship owners generally prefer long-term charters in a weak market. The Baltic Dry Index <.BADI> o-year lows in recent weeks but confidence has been rocked by South Korean dry bulk group Korea Line Corp <005880.ks> filing for bankruptcy protection, highlighting the risk of charter-party defaults.
“Concerns now persist industry-wide, as speculation grows as to whether faults,” Deutsche Bank analyst Justin Yagerman said.
“Continued charterer defaults could bring into question many companies’ above-market charters.” Flooding in Australia, the world’s biggest coal exporter, and weather-srupted coal shipments and dented sentiment for capesize vessels — the giants of seaborne trade routes, typically hauling 150,000 tonne cargoes such as iron ore and coal.
Demand for grains, though, has soared. Wheat prices in the European Union, the world’s No.2 exporter, a year, aided by a Russian export ban due to drought and strong demand from North Africa and Middle East countries.
Global food prices, which hit their highest level on record last month, is a mounting worry for world leaders. Recent catastrophic weather around the globe could put yet more pressure on the cost of food, an issue that has already helped spark protests across the Middle East. Egypt is the world’s biggest wheat importer.
Eagle Bulk Shipping , which operates supramax vessels that typically have around half the capacity of a capesize, lowing them to haul a wider range of cargoes, has placed half its ships in the spot market.
That strategy has been welcomed by investors, and Eagle Bulk Shipping’s price-to-earnings ratio of almost 35 is the highest among its peers, Thomson Reuters StarMine data shows.
“We prefer smaller vessels due to the more favorable supply dynamics, more diverse cargo loading options, record spot fixture activity for the last five months due to a recovering worldwide economy, and the increasing ton-mile in the grain trade,” FBR analyst Doug Garber said in a note.
Genco Shipping and Trading could be another to gain from a near-term rebound in day rates — the cost of renting a ship by the day — as it has roughly half its 2011 days in open or linked-to-index charters.
Conversely, Diana Shipping , DryShips , Navios Maritime Partners LP and others whose fleets are dominated by bigger ships, have placed more vessels in long-term contracts, hoping for steady returns. Diana and DryShips trade at just above 5 and 8 times forward earnings, respectively.
Iron ore and coal are the main drivers of the dry bulk trade, accounting for some two-thirds of demand, but both are highly dependent on China, making the shippers that own bigger vessels more vulnerable to demand swings in the world’s biggest commodity consumer.
Sterne Agee expects Baltic Dry Index spot rates to drop 16 percent this year and 9 percent in 2012, noting these declines will be hardest felt by those owning capesizes, where fleet growth is seen at 17 percent this year and 14 percent in 2012.
For capesizes, the brokerage forecast a 25 percent fall in spot rates this year to below $25,000 a day. Only three years ago, owners of these vessels could charge day rates in excess of $100,000 a day.
Supramax rates are seen dropping about 7 percent to $20,845.
“The largest part of the order book concerns the larger ships, the capes. It is actually the capes that are of a bigger concern to everybody in the industry,” said Michael Bodouroglou, chairman and CEO of Greece’s Paragon Shipping Inc , which has smaller supramax and handymax vessels among its fleet.
“The panamaxes, the supramaxes and in particular the handies I think they will fare a lot better particularly in the second quarter which is the season where the grain trades pick up from South America etc — these are trades which are accommodated in the smaller sizes,” he told Reuters.
The Baltic capesize Index <.BACI> has fallen by two-thirds in the past 3 months to its lowest in more than 2 years. Rates for supramax vessels were faring slightly better, though the Baltic’s supramax index <.BASI> has dropped by a quarter in the last 3 weeks.
“In the next few months, a moderate amount of cargo demand is likely to continue to surface, which is likely to result in supramax and handysize rates remaining at healthy levels,” said Jeffrey Landsberg, managing director of dry bulk consultancy Commodore Research.
“Global grain demand remains strong and will lend support to rates once the South American export season kicks in to full gear.” (sourced:reuters)

Tags: coal, drybulk, grains, iron ore, shipping, dry cargo shippers, vessels, spot market, Supramaxes, Handysizes, The Baltic Supramax Index, The Baltic Dry Index, Eagel Bulk Shipping, FBR analyst, Genco Shipping, Conversely, Diana Shipping , DryShips, Navios Maritime Partners LP

Mechel re-starts Nerungrinskaya coal washing plant after accident

Tuesday, 15 Feb 2011

Mechel announced the re launching of the Nerungrinskaya washing plant at Yakutugol OAO, following the accident on December 26 which saw the collapse of three thickeners in the washing shop.

The washing plant's coking coal concentrate production equipment was started back upon February 10. Operations were resumed at the washing shop's second and third sections, which at full load will allow the plant to maintain pre accident levels of concentrate production. Repairs are ongoing at the shop's first section.

The Nerungrinskaya washing plant's re start was preceded by major repair works to eliminate the accident's after effects, restore steelwork, strengthen the thickeners' assembly and prepare the equipment for operation. (sourced:steelguru)

Tags:Mechel, Nerungrinskaya coal washing plant,accident, Yakutugol OAO, collapse, thickeners, coking coal concentrate production, steel, coal,

Steel deal sets example for Japan Inc say analysts

By David Watkins (AFP)
Monday,14 Feb'2011

TOKYO — The proposed merger of two Japanese steel giants is a sign of an industry looking to reassert itself and an example to Japan Inc. that restructuring is crucial to take on competition, say analysts.

Japan's biggest steelmaker Nippon Steel and third-ranked rival Sumitomo Metal Industries are working towards a merger that would create the world's second-largest steel firm by 2012, behind Luxembourg-based ArcelorMittal.

The agreement is the first steel industry merger in a decade in the country, and analysts say the move sets an example to the rest of Japan Inc. as it grapples with a weak home economy, a strong yen and rising overseas rivals.

"There is a desperate need for mergers and acquisitions to stitch together Japan's diffuse corporate base," said Nicholas Smith, director of equity research with MFGlobal in Tokyo.

The Nippon Steel-Sumitomo Metal move is seen as indicative of the growing need for steelmakers to gain leverage as prices for coal, iron ore and other raw materials of steel touch record levels.

"Increased scale will make them stronger in negotiating with raw material suppliers -- the rapid run-up in material prices had really hammered profitability," said Smith.

"The merger will give Nippon Steel the scale to consider acquisitions of raw material suppliers, like the Chinese steelmakers have done," he said, noting Chinese crude steel production has more than quadrupled in the last 10 years.

The deal also serves as an example to the rest of corporate Japan.

Many see consolidation in Japan's corporate space as essential to taking on overseas competition, with too many companies making the same products compared with the likes of South Korea and industrial champions such as Samsung.

"Often in comparison with South Korea, Japan is said to have too many players in such markets as autos and electrical machinery," added Hideyuki Araki, economist at Resona Research Institute.

"They vie for the same pie and can be worn out in domestic competition. There is no doubt that a single company that has a strong grip on the industry can better compete in international markets," he said.

Sony partly blamed a fall in third quarter profit on falling TV prices amid heavy competition in a sector where it is up against compatriots such as Toshiba, Panasonic and Sharp.

"Japanese companies are forced to cut prices and have only slim margins amid too much competition," said Hiroshi Watanabe, economist at Daiwa Institute of Research.

The Japanese government has recognised the need for consolidation and is promoting M&As because it sees the need for more reorganisation in a wide range of domestic industries, including materials and electrical machinery.

Tokyo is looking to encourage more mergers and acquisitions by simplifying the tender offer process, speeding up anti-monopoly vetting of merger plans and providing loans for deals, Japanese media reports said this week.

The number of mergers and acquisitions by Japanese firms tumbled 13 percent on-year to 1,707 in 2010, slipping far below a recent peak of 2,775 in 2006, according to M&A advisory firm Recof Corp, the Nikkei business daily reported.

But merger efforts have met with failure in the past year, with executives on both sides unable to iron out integration problems.

Shinsei Bank and Aozora Bank last year scrapped a merger plan because they could not agree on a business strategy.

Japanese drink giants Kirin Holding Co. and Suntory Holdings Ltd. last year abandoned ambitious plans to merge and create one of the world's biggest brewers, unable to overcome differences over who would own and manage the future company.

However, on Thursday drinks maker Sapporo announced it would boost its stake in soft drink firm Pokka, the latest in a series of deals in a shrinking market where players are searching for growth.

While it is important to expand scale in the way Nippon Steel and Sumitomo Metal plan to as they seek more control over prices, a balance needs to be struck to retain enough domestic competition to drive innovation, analysts say.

In particular, Japan must not risk ceding its advantage in high-end products where it still has a commanding share, analysts say. Its steel is seen a symbol of its manufacturing expertise.

Toyota buys nearly 60 percent of its sheet steel for auto bodies from Nippon Steel and Sumitomo, analysts say, and Mazda and Honda buy around 70 percent.

On the other hand, "anybody can make construction steel, and a dizzying array of companies do," said Smith.

(sourced:AFP)

Asia Coal-Australia thermal coal prices up over $127/tonne

By Rebekah Kebede
PERTH Wed Feb 2, 2011 1:35pm IST
(Reuters) - Australia's thermal coal prices, a benchmark for Asia, climbed to more than $127 a tonne week to date, supported by the ongoing impact of floods in Queensland state on coal supplies.
Thermal coal on the globalCOAL Newcastle index for the week to date was $127.88 per tonne on Tuesday, up from $124.44 a week earlier and up more than $5 from $122.98 on Friday.
"It's definitely very tight. The floods have had their impact, no doubt about it. It's tight on the ground and most people feel it," one trade source said.
"It seems to be tight everywhere - I don't think there are any coal-producing basins globally that are not tight and it's obviously reflected in the price," the source said.
With supplies scarce and the start of the Chinese New Year, however, traders said that actual deals done were few and far between.

"I'm not actually sure how much physical has been done out of there," a Sydney based trader said. "There aren't that many physical tonnes to be traded."
The market was also keeping a close eye on Cyclone Yasi, which was barreling toward Queensland's northern coast and expected to land on early Thursday.
Floods in Queensland have already caused about 5.5 million tonnes of Australian production to be lost, according to a Reuters poll conducted last week.
Although Queensland produces mostly coking coal used for steelmaking, it does produce some thermal coal and any more severe weather could cause further production losses and reduce supplies.

Xstrata has already shut its 6 million tonne per annum (mtpa) Collinsville mine, which produces both coking and thermal coal, ahead of the cyclone. The company is also considering shutting its Newlands mine, which produces 11 mtpa of thermal and coking coal for export.
Supplies from neighboring Indonesia are also expected to be restricted with some Indonesian coal traders have declared force majeure after a trade rule change, with around 60-70 vessels stuck in various ports and 3.5 million tonnes unable to be shipped.
WEEK AHEAD
The market will continue to monitor Cyclone Yasi and watch for impacts to both coal mines and infrastructure. Any further coal disruptions could spark another price rally in thermal coal.
In the wake of the Queensland floods, thermal coal prices climbed nearly 30 percent to over $140 per tonne in mid-January from about $110 per tonne at the beginning of the year.
With supplies tight, market players will be looking for Japanese, South Korean, and Taiwanese utilities to begin looking for supplies later on in the year. (sourced:reuters)

Indonesian Export Jumps 35.38% in 2010

Tuesday, 01 February 2011 18:08
Indonesian export totaled US$157.73 billion in 2010, jumped 35.38% from US$116.51 billion in 2009. The export made its record during the history in December 2010 which totaled US$16.8 billion.
"Export continues rising and to record new high," BPS Chairman Rusman Heriawan told in press briefing today.

Oil and gas export totaled US$129.68 billion, mainly supported by mineral fuel mainly coal which accounted for US$18.73 billion and fat and vegetable oil which totaled US$16.29 billion.
The main contributors for export by countries are Japan (US$16.5 billion), China (US$14.07 billion) and United States (US$13.3 billion) which accounted for 33.85% of total export. Export to European union reached US$17.07 billion.

Meanwhile, import surged 40.05% to reach US$135.61 billion in 2010, compared to US$96.83 billion in 2009. Import of non oil and gas totaled US$108.24 billion.
The main contributors for import by countries are China (18.19%), Japan (15.62%), Singapore (9.29%) and European Union (9.02%).
For 2010, Indonesia recorded surplus of US$22.13 billion. (sourced:Theindonesiatoday.com)

New Hope's bid for coal company short: Northern Energy shares jumped 7c yesterday

By Matt Chambers, The Australian

February 01, 2011 12:00AM
COAL junior Northern Energy is most likely to reject a raised $225 million cash bid from New Hope because it remains well below the value ascribed to the target in an independent expert's report.
New Hope has boosted its hostile bid from $1.50 a share to $1.75, which is still less than half the upper range of the diluted value of between $2.70 and $3.99 a share assigned to Northern Energy by independent expert Lonergan Edwards in a recent target's statement.
Northern Energy managing director Kevin Barker said his board had not met to discuss the bid or form a recommendation to shareholders, but his view on the matter was clear.
"It remains significantly below the valuation of the company," Mr Barker said.
Northern Energy shares jumped 7c yesterday to a 2 1/2-year high of $1.74, indicating investors do not expect a competing bidder to value Northern Energy anywhere near as highly as Lonergan had.

Mr Barker said the target was still in discussions with other potential suitors after opening a data room late last year.
New Hope chairman Robert Millner said his new offer, which was at an 84 per cent premium to where the stock traded before the first New Hope bid, was a fair one.
"We think it is a very fully priced bid," Mr Millner said. "There are no other competing bids."
New Hope's bid is conditional on it securing 50.1 per cent of Northern Energy, of which it already has a 4.97 per cent stake.
"There is a risk that the price of Northern Energy may fall to pre-takeover approach levels if the offer does not succeed," Mr Millner said. He said there were significant risks associated with holding Northern Energy shares, particularly in relation to the funding and development of Northern Energy's project pipeline.

New Hope, by contrast, has $2 billion of cash reserves it can use to fund development.
Brisbane-based Northern Energy is planning to start production at is Maryborough coking coal project in 2012 and the Elimatta thermal coalmine in 2014, depending on Queensland infrastructure capacity.
Mr Barker noted that a number of milestones in development of Northern Energy's projects had been announced since the New Hope bid.
Coal prices, and those of coal stocks, had also risen.
"Northern Energy would most likely have responded positively to the changes in the economic environment, regardless of New Hope's offer," the target said.(sourced:theaustralian.com.au)

Bengal's secondary steel sector face raw material shortage

Wednesday, 26 Janurary, 2011

Kolkata, Jan 26 (IANS) The secondary steel sector in West Bengal, which churns a fifth of India's total production of this commodity, is in a severe crisis following insecurity over supply of raw materials, especially iron ore.
'Lack of raw material like coal and iron ore is severely affecting the secondary steel sector in West Bengal. Producers are hugely dependent on mines outside as the state is bereft of iron ore,' said Santosh Bajaj of Merchants' Chamber of Commerce.
'The mine owners are charging exhorbitant prices for iron ore, leading to the crisis in the secondary steel sector,'' Bajaj, who is chairman of the chamber's Iron and Steel planning Committee, told IANS.
Stating that only four-five coal blocks had been allotted to the state, Bajaj demanded that it be given iron ore mines and more coal blocks. The state's units produce a total of eight to ten million tonnes of steel and depend mainly on Orissa for iron ore.
'Steel makers of Orissa have recently submitted a proposal to the Orissa government that 70 percent of iron ore production of the state be set aside for them,' he said, adding if the demand is unmet, about 120 units of West Bengal will face acute scarcity of ore.
'The market is also in a very critical state because of the 15 percent price hike due to rise in raw material prices.'
The units that can be categorised under the secondary steel segment include sponge iron, mini blast furnace, induction furnace and electric arc furnace, hot rolled units, cold rolled units and colour coated units.
Kolkata-based Shyam Steel director Lalit Beriwala said: 'Secondary steel sector in West Bengal produces 20 percent of the country's total, but the problem of iron ore is making the industry unviable in the state.'
Moreover, iron ore prices have also increased by up to 20 percent, not counting the sharp hikes in infrastructure, labour and electricity costs, he said.

Steel product prices went up 15 percent, but the sector was not reaping any benefit from it due to escalating manufacturing cost, which has reduced the profit margin, making the sector unviable, Beriwala lamented. But demand has not changed very much so far.
He suggested that there should be a long-term pricing policy for iron ore and the centre should ban its export, adding the next month's national Budget should keep excise duty on steel intact and give emphasis on infrastructure projects to raise demand.

'Iron ore export is also hurting the secondary steel sector. It should be banned,' said R.K. Sharma, chief financial officer at Jai Balaji Group, a leading steelmaker. 'We have informed the state government. Now they have to take a decision.' (sourced: IANS via sify)