Floods cut Australia's Queensland coal output 30 mln/t-council

Fri Apr 1, 2011 7:36am GMT

* Australia floods seen causing deeper losses in Queensland coal output
* New loss estimates by Resources Council exceed earlier govt tallies
* Coking coal worst hit

By James Regan

SYDNEY, April 1 (Reuters) - Australia's Queensland state lost about 30 million tonnes of coal production, or 15 percent its annual output, due to extensive summer flooding, the Queensland Resources Council said on Friday, suggesting official estimates of lost output may be too low.

The Council forecast total coal production for fiscal 2010/11 from the nation's main coal mining state will be cut to 170 million tonnes from a previous estimate of 200 million tonnes, based on feedback from coal-handling terminals.

The council's board of directors includes executives from some of the world's biggest coal mining companies, including BHP Billiton , Xstrata , Rio Tinto and AngloAmerican .

The extent of lost production indicates the coal mining industry is only slowly recovering from the devastating floods that slashed production and damaged infrastructure between late November and February.

"The recovery has been a very slow process," Jim Devine, a spokesman for the mining group told Reuters.

The floods have driven both thermal and metallurgical coal prices up significantly.

Prices in Asia for metallurgical or coking coal, which is used for steel-making, are expected to increase by nearly 50 percent for the second quarter of 2011, with the contract for coking coal expected to settle around $330 per tonne, up from $225 a tonne in the first quarter.

The floods also helped push up thermal coal prices, with Japanese thermal coal contract for fiscal 2011, reaching a record settlement of about $130 per tonne this week.

Traditionally around 85 percent of Queensland's coal is shipped out, meaning export losses could be as high as 25.5 million tonnes.

The Queensland Treasury in its mid-year economic and fiscal review estimated around 15 million tonnes in coal exports is expected to be delayed or lost in 2010-11.

"Coking coal is taking the majority of the hit because it represents the majority of the exports," Devine said.

"We still have three out of four coal mines in Queensland working under transitional environmental programmes to remove water form their sites," he added.

The council's estimate of 30 million tonnes in lost production is also well above those compiled from a Reuters poll in late January that showed the floods would cause 11.3 million tonnes in lost coking coal production in 2011, representing about 5 percent of world exports.

The poll also showed losses to thermal coal production will be much less significant, reaching around 5.5 million tonnes, or less than 1 percent of world trade.

Typically, Queensland produced 60 percent metallurgical coal and 40 percent thermal coal, Devine said. (Additional reporting by Rebekah Kebede in PERTH; Editing by Mark Bendeich, sourced Reuters)

Orissa may allow POSCO to export and import iron ore

Friday, 01 Apr 2011

Orissa government has agreed with POSCO India to allow swap of certain quantities of iron ore for production of better quality steel in its proposed 12 million tonne per annum steel project near Paradip.

This was stated by Orissa Steel and Mines Minister Mr Raghunath Mohanty while replying to a question in the state assembly.

Mr Mohanty said that “The company may swap certain quantities (not exceeding 30% of the requirement for the Paradip plant annually) of such iron ore which have high alumina content with equal quantity of low alumina content iron ore of equivalent or better Fe content imported for blending in order to produce better steel in the Paradip project and conserve energy.”

The minister said that state government is examining other factors associated with swapping of iron ore with the company.

Mr Mohanty said that the matters under state government’s examination are the amount of foreign exchange to be spent on importing better quality iron ore, the country from which the raw material would come and the veracity of pollution to be created due to processing of such imported ore.

(Sourced from PTI)

China imported iron ore stocks rise 0.8 pct this week

Fri Apr 1, 2011 8:35am GMT

BEIJING, April 1 (Reuters) - Stockpiles of imported iron ore at major Chinese ports rose 0.8 percent this week to end at
79.85 million tonnes, up for the first time in a month, according to data from industry consultancy Mysteel. 

China's port iron ore stocks have stood at more than 60 million tonnes since 2008, and surged past the 80 million tonne
mark in February following a spree of orders by local mills and traders banking on strong steel demand. 

Despite the drop in orders since mid-February, port stocks have fallen by just a fraction, indicating that steel mill
inventories have not yet reached a critical level.  

Prices of the key steelmaking raw material inched up over the week as end users returned to the market to replenish stocks
that had been dwindling since mid-February. 

But analysts were pessimistic about long-term demand, and said orders could slow in April as steel mills start to digest
the costly port inventories.  

 Following is a table showing stockpile movements this week. 
Country            Stocks         Weekly Change
Australia          28.86 mln T      +190,000
Brazil             21.13 mln T       +90,000
India              14.33 mln T      +320,000
Total              79.85 mln T      +660,000

(Reporting by David Stanway; Editing by Chris Lewis, sourced Reuters, Mysteel)

Military no cure for Libya crisis: German foreign minister

Fri Apr 1, 2011 7:38am GMT

BEIJING (Reuters) - The crisis in Libya cannot be resolved militarily, Germany's foreign minister said in Beijing on Friday, calling for efforts for a political solution for the oil-rich North African nation.

Germany broke ranks with the United States, France and Britain and joined China, Russia, India and Brazil in abstaining on a United Nations vote authorising the use of force to enforce a no-fly zone over Libya and protect civilians.

"The Libyan situation cannot be resolved by military means," Guido Westerwelle told reporters after meeting his Chinese counterpart Yang Jiechi, according to a pool report.

"There can only be a political resolution and we must get the political process under way. That should begin with a ceasefire that Gaddafi must heed to allow the peace process to begin," he said.

Westerwelle said at an EU foreign ministers' meeting last month that Arab League criticism of the air strikes had vindicated Germany's reluctance to back the action.

Chinese Foreign Minister Yang said China was "worried by continued reports of deaths and injuries among civilians and continuing clashes," and repeated that the crisis "must be dealt with appropriately by diplomatic and political means."

Berlin had long said it did not believe a no-fly zone or air strikes would be successful in driving Libyan leader Muammar Gaddafi out or protecting Libyan civilians.

Westerwelle has dismissed claims that Berlin was isolated after refusing to join its NATO allies in staging military strikes on Libya.

German Chancellor Angela Merkel's decision to opt out of any military action in Libya has drawn criticism at home, putting the government on the defensive over a policy that opinion polls suggest should be popular with voters. (sourced Reuters)

Portuguese president dissolves parliament, calls for elections in June

Fri, April01, 2011 04:59:23 |English.news.cn

Portugal's President Anibal Cavaco Silva attends a news conference at the Belen Palace in Lisbon March 31, 2011. Silva on Thursday dissolved parliament and set a snap election for June 5 following the resignation of the minority Socialist government of Prime Minister Jose Socrates.(Xinhua/Reuters Photo)

LISBON, March 31 (Xinhua) -- Portuguese President Anibal Cavaco Silva decided on Thursday to dissolve the parliament and call for elections on June 5. This is the outcome of the political crisis that started on March 23, when the five opposition parties from the left to the right wing united to defeat the government budget cut measures.

According to President Cavaco Silva, "In the current parliamentary framework it was not possible to generate a government solution that could run the country's affairs. I have taken this decision having in mind the difficulties of the minority government to approve the necessary measures to face the country's problems. There is also a lack of confidence between the political parties."

Although the parliament decision was a week ago, the president only could announce his decision Thursday because of the legal formalities. He had to call for a State Council meeting a mandatory presidential advisory board before publishing his decision. Editor: Mu Xuequan, Xinhua

Tensions rise between Italy, France over immigrants

llegal north African immigrants protest over stagnated evacuation out of the southernmost Italian island of Lampedusa, March 31, 2011. Tensions between Italy and France were rising over the immigration emergency as more refugees coming from the southern island of Lampedusa tried to escape across the frontier and were pushed back by the French police. (Xinhua/Wang qingqin)

ROME, March 31 (Xinhua) -- Tensions between Italy and France were rising over the immigration emergency as more refugees coming from the southern island of Lampedusa tried to escape across the frontier and were pushed back by the French police.

Undesecretary of State Stefania Craxi said Thursday that France was not doing its part in sharing the burden of hosting some of the over 16,000 of North African immigrants which have landed on Italy's shores since January.

"This humanitarian emergency does not only concern Italy and we demand that Paris shows solidarity and generosity as becomes relations between European member states,"said Craxi.

Despite recognizing the existence of a bilateral treaty that grants France the automatic right to push back all immigrants coming from Italy, Craxi demanded more flexibility and sense of cooperation from her French colleagues, local media reported.

In March, over 3,300 desperate Tunisian immigrants coming from southern Italy have reached the northern town of Ventimiglia, located at 10 kilometers from the border with France, in search of better conditions. Most arrive by train but some also risk their lives traveling in the trunk of cars.

Ventimiglia is a passage way, from here refugees try to pass the frontier to France in all possible ways (on trains, walking across the border or along the beach) but have been systematically pushed back to Italian territory by the French authorities, who have adopted a stricter policy towards refuges.

In recent weeks some 600 immigrants were intercepted and pushed back by the French frontier police. Following immigration emergency in Italy, France has tighten border controls by placing over 300 policemen on railways.

Ventimiglia's mayor Gaetano Scuillino has voiced concern that his hometown turned into the"northern Lampedusa." A new immigrant center was opened here on Thursday but there's not enough space to host all the refugees being pushed back from France, he said.

Replying to Italy's criticism, the French government on Thursday said that it was Italy's duty to send the refugees back home in accordance with the Schengen and bilateral agreements.
Editor: Mu Xuequan, Xinhua

Xstrata, Chugoku settle FY2011 thermal coal contract at $130/tonne

Thu Mar 31, 2011 11:21pm GMT

PERTH, April 1 (Reuters) - Xstrata and Chugoku Electric have settled the Japanese annual coal contract for the Japanese fiscal year starting April 1 at a record level of around $130 per tonne, sources told Reuters Friday.

The settlement price exceeds the 2008 record of $125 per tonne is also considerably higher than the annual contract price of just under $100 set in 2010. (Reporting by Rebekah Kebede,sourced Reuters)

Finland's Outokumpu may dump nuclear project-report

Fri Apr 1, 2011 3:01am GMT

HELSINKI, April 1 (Reuters) - A plan by Fennovoima to build a nuclear reactor in Finland could be at risk of falling through as Outokumpu (OUT1V.HE: Quote), the company's biggest industrial owner, eyes other nuclear stakes instead, a Finnish paper reported.

Steelmaker Outokumpu has held talks with forestry group UPM-Kymmene (UPM1V.HE: Quote) about acquiring some of its shares in other nuclear projects in the country, Tekniikka & Talous newspaper reported on Friday, quoting unnamed industry sources.

UPM-Kymmene owns part of utility company Teollisuuden Voima (TVO), which is currently building the much-delayed Olkiluoto 3 reactor in Western Finland, and holds a principle permit for its next reactor, Olkiluoto 4.

The Finnish paper cited sources as saying Outokumpu may be interested in a smaller, cheaper cut of Olkiluoto 4 over a stake in new nuclear company Fennovoima.

UPM-Kymmene's chief financial officer, Tapio Korpeinen, said in the paper his company's forestry plants would not need as much electricity as they are set to have in TVO, but declined to say if UPM would reduce its stake.

Outokumpu, which owns about 10 percent of Fennovoima and has appeared as its strongest promoter, declined to comment on the report.

Fennovoima expects its plant to cost 4 billion to 6 billion euros ($5.69 billion-$8.53 billion). It's biggest owner, German utility E.ON (EONGn.DE: Quote), said earlier this week it will seek to incorporate into future projects what has been learned from Japan's Fukushima nuclear disaster, but assured it remained committed to Fennovoima.

Last July, the Finnish parliament gave permission to TVO and the Fennovoima consortium to construct new nuclear reactors, taking Finland's total reactors to seven.

Fennovoima has not yet chosen a location or a supplier for its reactor. (Reporting by Jussi Rosendahl; Editing by Steve Orlofsky,sourced Reuters)

Iron Ore-Prices extend gains as restocking continues

Fri Apr 1, 2011 3:13am GMT

BEIJING, April 1 (Reuters) - Spot iron ore prices extended their recovery on Friday, inching towards $180 per tonne as Chinese buyers continued to replenish their stocks, but traders were still bracing themselves for another slump.

A commodities broker based in Hong Kong said most in the market still believed current prices were unsustainable, even after the pick-up in trade this week.

"We may have seen a jump this week but generally people are in the market for one or two shipments and that's it -- they will buy what they need but stockpiles are still pretty high," the broker said.

Industry consultancy Mysteel's 63.5-63 percent index for Indian fines on the Chinese market reached $179 per tonne on Friday, up $2 on the day and $8 since last week.

Platts 62 percent iron ore index IODBZ00-PLT ended Thursday unchanged at $175 a tonne after jumping $5.50 on Wednesday.

Metal Bulletin's 62 percent gauge .IO62-CNO=MB reached $172.87, up $3.16, while the Steel Index .IO62-CNI=SI saw a $1.90 increase to $172.40.

The broker said the relatively large increases might have been down to a decision by Rio Tinto and BHP Billiton to auction off a number of cargoes this week.

"They have each got a dozen customers and they hold internal auctions of cargoes -- these didn't previously go into the index but now they do, and they might have a substantial impact," he said.

Three Chinese traders contacted by Reuters on Friday said the consensus in the market was that prices will fall to around $160-165 in the coming month.

As the second quarter begins, the rationale behind the three-month pricing system used by the big iron ore suppliers could be further undermined, the broker suggested.

According to the new rules, April-June prices will be based on an average of index prices from December to February. Despite a slump in spot iron and steel prices in March, mills are now facing record-high contract iron ore costs.

Reuters calculations suggest that three-month contract prices could rise 20 percent to almost $180 per tonne beginning on April 1. [ID:nL3E7E107E]

"The buyer has a choice and he could say that he doesn't want the benchmark but wants the spot price instead -- and that could force (the spot price) up," said the broker. (Reporting by David Stanway; Editing by Ken Wills, sourced Reuters)

Tags :BHP Billiton, Chinese iron ore traders, raw material, steel mills, steelmaking, spot prices

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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