Coal stocks in China’s QHD port fell to two years

Monday, 10 October 2011

During China’s Golden Week, the coal stocks in China’s Qin Huang Dao (QHD) port plunged to a two year low of 3.97 million tonnes, a 46% slash from 7.3 million

tonnes in early September. Two points are worth mentioning regards to this phenomenon. Firstly, China’s DaQin railway went into the 2nd round of maintenance for around 15 days (20 Sep to 5 Oct), which results in a daily reduction of 0.3 million tonnes in coal shipments to northern ports. Secondly, five coal mines, which account for around 5 million tonnes of monthly output, have been forced to shut down for overhauls after a fatal accident. China’s domestic coal prices, as a result, have reasonably begun to creep up. After the Golden Week when the DaQin railway is back to full capacity, QHD port’s coal stocks are expected to be gradually refilled. Nonetheless, as Chinese power producers ramp up their seasonal restocking during the remainder of the October, this will likely create support for coal prices and also imply firm demand for domestic and foreign coal suppliers this month.

Source: ICAP Shipping

European benchmark coal for next year gains most in three weeks

Friday, 07 Oct 2011

Bloomberg reported that benchmark European coal advanced, heading for a highest daily gain in three weeks.

Thermal coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year increased 0.8% to USD 120 per tonne as of 10:35 AM in London. That would be the biggest one-day rise since September 15.

Bloomberg tracks data from information supplied by ICAP Plc, GFI Group Inc, Spectron Group Ltd, Credit Suisse Group AG, IHS McCloskey, Tradition Financial Services and Tullett Prebon Plc.

(Sourced from Bloomberg)

German Power Unchanged Near One-Week Low as Coal Prices Stable

Mar 11, 2011 3:10 PM GMT+0530
By Lars Paulsson

German electricity for delivery next year was unchanged from its lowest close in more than a week as coal prices were stable.

Baseload power for 2012 was unchanged at 53.15 euros ($73.44) a megawatt-hour, its lowest close since March 3, according to prices compiled by Bloomberg at 10:20 a.m. Berlin time. Baseload is generated and sold around the clock.

The contract, Europe’s benchmark electricity price, is headed for its first weekly drop in four weeks. It has traded between 50.75 euros and 54.60 euros this year.

Coal for 2011 delivery to Amsterdam, Rotterdam or Antwerp gained 0.4 percent to $122.25 a metric ton. Germany generates about a fifth of its power from hard coal. The country also gets electricity from nuclear, natural gas, wind and solar sources.

Baseload is delivered around the clock. Bloomberg tracks prices from brokers including ICAP Plc, GFI Group Inc., Spectron Group Ltd., Tullett Prebon Plc and Tradition Financial Services.(By bloomberg)

Tags : GFI Group Inc, Spectron Group Ltd, Tullett Prebon Plc, Tradition Financial services, raw material, power plants

Return of Australian coal exports key to freight recovery: Genco

Feb26, 2011

A return of export volumes of coking coal from the east coast of Australia and in iron ore volumes from Brazil could lead to a recovery of Capesize freight rates during the course of 2011,

New York-listed dry bulk ship owner Genco Shipping & Trading said Thursday.

Speaking at the company's fourth-quarter earnings call, Robert Buchanan, president of Genco, said the disruptions caused by the severe flooding in Queensland in December and January and weather-related delays to iron ore shipments from Brazil and South Africa, accounted for approximately 5% of global coal and iron ore seaborne trade, quoting estimates from commodities and ship broking group ICAP.

He also said that a cold winter with high snowfall in the US had limited the amount of coking coal shipments from the US east coast to make up for shortfalls of shipments from Queensland.

Earlier Thursday, Asian coal consumers told Platts that Rio Tinto had lifted a force majeure on its Kestrel semi-hard coking coal brand after almost two months. A Rio Tinto Coal Australia spokesman confirmed that force majeure had been lifted from both the Blair Athol Mine in Queensland and from the Kestrel Mine.

Kestrel is believed to be the first major Australian coking coal brand to have a force majeure lifted since the flooding.

The Kestrel mine supplies 4.2 million mt of coking and thermal coal to customers worldwide.
Buchanan said the expected influx of new ships from the shipyards this year may not be as bad as appeared on paper, because of the likelihood of up to 40% slippage in delivery schedules, following a trend seen in the last few years.

He conceded that the effect of China's tightening monetary policy, in terms of increasing the capital reserve requirements of banks, and the Korea Lines bankruptcy were having a negative effect on sentiment, "but this is reflected more in the forward market."

Genco does not have any exposure to Korea Lines, which filed for the equivalent of bankruptcy protection on January 25. Korea Lines is one of Asia's largest operators of dry bulk tonnage and, according to analysts, fell victim of the collapse in freight rates, having chartered-in its fleet at much higher rates than can be obtained by re-letting the ships on the spot market.
Buchanan also predicted a hefty increase in the scrapping of dry bulk carriers, saying that 2.1 million dwt of dry bulk tonnage had already been scrapped this year compared with 5.7 million dwt in the whole of 2010.

"According to our internal company estimates, we calculate that the cash breakeven for [a fully amortized], 20-year-old Capesize is approximately $12,500/day," said Buchanan. However, the freight market is showing returns of around $4,000-$5,000/day.
Buchanan said it is the larger ships that get scrapped first, because of the wear and tear they endure compared with smaller vessels. "Think about the length and the twisting of the steel that goes on and add iron ore into the equation," he said. Iron ore exerts more stresses on the hull of a dry bulk carrier than any other cargo type.

He said that with a Capsize approaching 20 years of age, and its fifth special survey at a cost of around $3 million, with another special survey due every 2.5 years thereafter, several owners might decide that it is better to sell for scrap.
Buchanan said that 21% of the dry bulk fleet was more than 25 years old and 28% was more than 20 years of age.

He said prices offered by ship breakers were around $500/light displacement ton. "As long as the price of steel stays firm, the scrap price should stay firm," he said.
On Wednesday, Genco reported fourth-quarter net attributable income of $34.8 million, down slightly from $35.5 million a year earlier. In the full year it reported net income of $141.2 million, down from $148.62 million.

Genco saw Q4 voyage revenues climb to $129.9 million from $96.2 million a year earlier, helped by an expansion in its fleet. Total revenues were $130.7 million, up from $96.2 million a year earlier. In the full-year, voyage revenues rose to $447.4 million from $379.5 million in 2009. Total full-year revenues were $448.7 million, up from $379.5 million in 2009.(source: Platts)

Return of Australian coal exports key to freight recovery: Genco

Friday, Feb25, 2011 617 am EST/1117 GMT

New York (Platts)

A return of export volumes of coking coal from the east coast of Australia and in iron ore volumes from Brazil could lead to a recovery of Capesize freight rates during the course of 2011, New York-listed dry bulk ship owner Genco Shipping & Trading said Thursday.

Speaking at the company's fourth-quarter earnings call, Robert Buchanan, president of Genco, said the disruptions caused by the severe flooding in Queensland in December and January and weather-related delays to iron ore shipments from Brazil and South Africa, accounted for approximately 5% of global coal and iron ore seaborne trade, quoting estimates from commodities and ship broking group ICAP.

He also said that a cold winter with high snowfall in the US had limited the amount of coking coal shipments from the US east coast to make up for shortfalls of shipments from Queensland.

Earlier Thursday, Asian coal consumers told Platts that Rio Tinto had lifted a force majeure on its Kestrel semi-hard coking coal brand after almost two months. A Rio Tinto Coal Australia spokesman confirmed that force majeure had been lifted from both the Blair Athol Mine in Queensland and from the Kestrel Mine.

Kestrel is believed to be the first major Australian coking coal brand to have a force majeure lifted since the flooding.

The Kestrel mine supplies 4.2 million mt of coking and thermal coal to customers worldwide.

Buchanan said the expected influx of new ships from the shipyards this year may not be as bad as appeared on paper, because of the likelihood of up to 40% slippage in delivery schedules, following a trend seen in the last few years.

He conceded that the effect of China's tightening monetary policy, in terms of increasing the capital reserve requirements of banks, and the Korea Lines bankruptcy were having a negative effect on sentiment, "but this is reflected more in the forward market."

Genco does not have any exposure to Korea Lines, which filed for the equivalent of bankruptcy protection on January 25. Korea Lines is one of Asia's largest operators of dry bulk tonnage and, according to analysts, fell victim of the collapse in freight rates, having chartered-in its fleet at much higher rates than can be obtained by re-letting the ships on the spot market.

Buchanan also predicted a hefty increase in the scrapping of dry bulk carriers, saying that 2.1 million dwt of dry bulk tonnage had already been scrapped this year compared with 5.7 million dwt in the whole of 2010.

"According to our internal company estimates, we calculate that the cash breakeven for [a fully amortized], 20-year-old Capesize is approximately $12,500/day," said Buchanan. However, the freight market is showing returns of around $4,000-$5,000/day.

Buchanan said it is the larger ships that get scrapped first, because of the wear and tear they endure compared with smaller vessels. "Think about the length and the twisting of the steel that goes on and add iron ore into the equation," he said. Iron ore exerts more stresses on the hull of a dry bulk carrier than any other cargo type.

He said that with a Capsize approaching 20 years of age, and its fifth special survey at a cost of around $3 million, with another special survey due every 2.5 years thereafter, several owners might decide that it is better to sell for scrap.

Buchanan said that 21% of the dry bulk fleet was more than 25 years old and 28% was more than 20 years of age.

He said prices offered by ship breakers were around $500/light displacement ton. "As long as the price of steel stays firm, the scrap price should stay firm," he said.

On Wednesday, Genco reported fourth-quarter net attributable income of $34.8 million, down slightly from $35.5 million a year earlier. In the full year it reported net income of $141.2 million, down from $148.62 million.

Genco saw Q4 voyage revenues climb to $129.9 million from $96.2 million a year earlier, helped by an expansion in its fleet. Total revenues were $130.7 million, up from $96.2 million a year earlier. In the full-year, voyage revenues rose to $447.4 million from $379.5 million in 2009. Total full-year revenues were $448.7 million, up from $379.5 million in 2009. (By Platts)

Coking coal spot prices jump by 14pct last week - Report

Thursday, 27 Jan 2011
Bloomberg reported that Australian coking coal jumped 14% last week as buyers continued to assess the effect on supplies of flooding in the state of Queensland. Queensland, producer of about half of global seaborne supply of coking coal for steelmaking, suffered its worst floods in 50 years this month.

Shipments from the port of Hay Point, the biggest export harbor for the material, dropped 22% last month from November as floodwaters shut mines and damaged rail lines.
Mr Daniel Brebner, an analyst at Deutsche Bank AG in London, said that "The market's still trying to understand what the impact will be in terms of volumes removed. We have seen the worst of the flooding, and that’s behind us and really it comes down to, now, how quickly production can get back on stream."

According to Petersfield, England based market researcher IHS McCloskey, Australian hard prime coking coal sold for USD 320 a tonne on average last week, up from USD 280 the week before. That's the highest level for the data going back to the week ended November 5th 2010.
Mr Brebner said that "Prices may rise over the course of the next month, and USD 350 to USD 400 a tonne is within the realm of possibility."

BHP Billiton Limited, an equal partner in the world's biggest exporter of coking coal, on January 20th 2011 predicted that disruption at its Australian operations until the end of June 2011. Thermal coal from Richards Bay, South Africa, site of the continent's biggest export facility for the fuel, fell 6.1% to an average USD 120.83 a tonne. Thermal coal is burned to generate power. Shipments from the port climbed 3.8% in 2010 to 63.43 million tonnes, the first annual increase in five years.
Benchmark European coal derivatives headed for a third consecutive lower close. Coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year fell 35 cents or 0.3% to USD 115 a tonne in London. The data are drawn from information supplied by ICAP Plc, GFI Group Inc, Spectron Group Limited, Tullett Prebon Plc, Credit Suisse Group AG, McCloskey, Bloomberg and Tradition Financial Services.(Sourced from http://www.bloomberg.net/)