Understanding Coal Analysis

By Michael Hutagalung

“How to understand a coal sample analysis? What is the difference between proximate and ultimate analysis? What is AR (as-received) basis? Is is the same with DAF (dry, ash free) basis? How about AD (air-dried) basis? And what coal ash analysis is all about?”

Well, it is indeed a long list of questions to answer but the explanation is actually not as twisted as it seems. The main purpose of coal sample analysis is to determine the rank of the coal along with its intrinsic characteristics. Furthermore, these data will be used as the fundamental consideration for future concerns, for instance: coal trading and its utilizations.
Coal Properties

Coal comes in four main types or ranks: lignite or brown coal, bituminous coal or black coal, anthracite and graphite. Each type of coal has a certain set of physical parameters which are mostly controlled by moisture, volatile content (in terms of aliphatic or aromatic hydrocarbons) and carbon content.

1. Moisture
Moisture is an important property of coal, as all coals are mined wet. Groundwater and other extraneous moisture is known as adventitious moisture and is readily evaporated. Moisture held within the coal itself is known as inherent moisture and is analyzed. Moisture may occur in four possible forms within coal:
* Surface moisture: water held on the surface of coal particles or macerals
* Hydroscopic moisture: water held by capillary action within the microfractures of the coal
* Decomposition moisture: water held within the coal’s decomposed organic compounds
* Mineral moisture: water which comprises part of the crystal structure of hydrous silicates such as clays.
2. Volatile matter
Volatile matter in coal refers to the components of coal, except for moisture, which are liberated at high temperature in the absence of air. This is usually a mixture of short and long chain hydrocarbons, aromatic hydrocarbons and some sulfur. The volatile matter of coal is determined under rigidly controlled standards. In Australian and British laboratories this involves heating the coal sample to 900 ± 5 °C (1650 ±10 °F) for 7 minutes in a cylindrical silica crucible in a muffle furnace. American Standard procedures involve heating to 950 ± 25 °C (1740 ± 45 °F) in a vertical platinum crucible.
3. Ash
Ash content of coal is the non-combustible residue left after coal is burnt. It represents the bulk mineral matter after carbon, oxygen, sulfur and water (including from clays) has been driven off during combustion. Analysis is fairly straightforward, with the coal thoroughly burnt and the ash material expressed as a percentage of the original weight.
4. Fixed carbon
The fixed carbon content of the coal is the carbon found in the material which is left after volatile materials are driven off. This differs from the ultimate carbon content of the coal because some carbon is lost in hydrocarbons with the volatiles. Fixed carbon is used as an estimate of the amount of coke that will be yielded from a sample of coal. Fixed carbon is determined by removing the mass of volatiles determined by the volatility test, above, from the original mass of the coal sample.

Coal Proximate Analysis

The objective of coal ultimate analysis is to determine the amount of fixed carbon (FC), volatile matters (VM), moisture, and ash within the coal sample. The variables are measured in weight percent (wt. %) and are calculated in several different bases. AR (as-received) basis is the most widely used basis in industrial applications. AR basis puts all variables into consideration and uses the total weight as the basis of measurement. AD (air-dried) basis neglect the presence of moistures other than inherent moisture while DB (dry-basis) leaves out all moistures, including surface moisture, inherent moisture, and other moistures. DAF (dry, ash free) basis neglect all moisture and ash constituent in coal while DMMF (dry, mineral-matter-free) basis leaves out the presence of moisture and mineral matters in coal, for example: quartz, pyrite, calcite, etc. Mineral matter is not directly measured but may be obtained by one of a number of empirical formula based on the ultimate and proximate analysis.

.

Proximate Analysis	unit	(ar)	(ad)	(db)	(daf)
Moisture	(wt. %)	3.3	2.7
Ash	(wt. %)	22.1	22.2	22.8
Volatile Matter	(wt. %)	27.3	27.5	28.3	36.6
Fixed Carbon	(wt. %)	47.3	47.6	48.9	63.4
Gross Calorific Value	(MJ/kg)	24.73	24.88	25.57	33.13

A table is shown above containing an example of proximate analysis data of coal. Conversion from one basis to another can be performed using mass balance equations. The standard practice for proximate analysis of coal may be referred to ASTM D3172-07a or ISO 17246:2005.

Coal Ultimate Analysis

Similar to coal proximate analysis, the objective of coal ultimate analysis is to determine the constituent of coal, but rather in a form of its basic chemical elements. The ultimate analysis determines the amount of carbon (C), hydrogen (H), oxygen (O), sulfur (S), and other elements within the coal sample. These variables are also measured in weight percent (wt. %) and are calculated in the bases explained above.

Ultimate Analysis	unit	(ar)	(ad)	(db)	(daf)
Carbon (C)	(wt. %)	61.1	61.5	63.2	81.9
Hydrogen (H)	(wt. %)	3.00	3.02	3.10	4.02
Nitrogen (N)	(wt. %)	1.35	1.36	1.40	1.81
Total Sulfur (S)	(wt. %)	0.4	0.39	0.39
Oxygen (O)	(wt. %)	8.8	8.8	9.1

A table is shown above containing an example of coal ultimate analysis data and showing significant elements only. Conversion from one basis to another can be performed using mass balance equations. The standard practice for ultimate analysis of coal may be referred to ASTM D3176-89(2002) or ISO 17247:2005.

Ash Analysis

Oxides	wt.% of ash (Calculated)	Elements	wt.% of ash (Measured)
Na2O	0.35	Na	0.26
MgO	0.48	Mg	0.29
Al2O3	20.0	Al	10.6
SiO	74.1	Si	34.6
P2O5	0.05	P	0.05
K2O	1.1	K	0.92
CaO	0.68	Ca	0.49
TiO2	0.80	Ti	0.48
Mn3O4	0.06	Mn	0.05
Fe2O3	3.25	Fe	2.28

An analysis of coal ash may also be carried out to determine not only the composition of coal ash, but also to determine the levels at which trace elements occur in ash. These data are useful for environmental impact modelling, and may be obtained by spectroscopic methods such as ICP-OES or AAS. An example of coal ash composition is shown on the right.

Beside composition of coal ash, ash fusion point is also one significant parameter in ash analysis. The optimum operating temperature of coal processing will depend on the gas temperature and also the ash fusion point. Melting of the ashes may cause them to stick to the walls of the reactor and result in a build-up.

(sourced MajariMagazine.com)

India's coal crunch may not lead to imports soon: Barclays

Thursday, 17 November 2011

The South African Coal benchmark price, API4, has recently been trading below $110/t, after spending most of the year closer to $120/t, due to weak global demand for seaborne thermal coal. Many market participants have expected that dangerously low utility coal stocks in India would provide some support to prices, but Indian utilities have not picked up their pace of buying, which, might take a while to recover unless, see more states increase power tariffs, said Barclays in a research note.

According to the ICMW, an especially wet monsoon season has caused Indian coal production in August to fall by more than 15% y/y and flooded coal stocks. October was then marred by regional political protests and industrial action that further hampered the recovery of domestic production. The reduction in production and lack of imports have led to domestic coal shortages, which in turn has resulted in endemic power shortages.

According to a CEA report, as of 7 November, 38 thermal plants in the country have coal stocks at highly critical levels (less than 4 days). While a lack of imports has contributed to the shortfall, there is an incongruity in that India still boasts high port stocks, currently at more than 10mt. One of the reasons is that power generators are reluctant to burn the expensive seaborne Coal to resolve the power shortage since they are currently negotiating with the state governments for an increase in power tariffs.

Moreover, power utilities are also reluctant to burn the expensive coal since the regulated power prices have not fully kept pace with the high level of coal prices seen this year. In FY 2010-11, average power rates rose 6.5%, while the cost of generation increased by 16.5% in the period.
Moreover, with Coal India raising domestic coal prices, the squeeze on power plant profits has strengthened. Recently, news of state-specific increases in power prices has started to appear. At least 8 out of the 28 states and 1 territory (Delhi) have either implemented or proposed power tariff hikes in the past three months.

Most notably, Maharashtra, the state with the largest thermal generation capacity, has announced power tariff hikes of roughly 10% in early November. Nonetheless, despite these hikes, the scale of increase in input costs still outpaces current power prices in most of the country.

As a result, although the recent power tariff hikes, in theory, should provide some incentive to re-open the window for imported coal in India, there is still some way to go for those tariffs to rise before the utilities break even, and thus the increase in imports could be slow to materialize.
Source: Commodity Online

Zambia doubles mine royalties to fund big budget

Fri Nov 11, 2011

* Govt revives Eurobond plans
* Social spending jumps, budget deficit at 4.3 pct of GDP
* Mining firms "to go ballistic" over royalties increase

LUSAKA, Nov 11 (Reuters) - Zambia's new government unveiled an expansive 2012 budget on Friday, with big increases in social spending and farming subsidies to be paid for by a rise in mineral royalties and a debut $500 million Eurobond.

In the first budget since September's election upset, Finance Minister Alexander Chikwanda put flesh on the bones of new President Michael Sata's promises to spread the benefits of strong growth in Africa's biggest copper producer.

Overall spending would rise to 27.7 trillion kwacha ($5.5 billion), or 26.5 percent of gross domestic product (GDP), from 21 percent in 2011, Chikwanda said.

Domestic borrowing for the year would amount to 1.3 percent of GDP and foreign financing would be 3.0 percent, giving an overall deficit of 4.3 percent of GDP, Chikwanda said. Foreign aid would amount to less than 2 percent of GDP.

Analysts said the budget certainly qualified as "pro-poor", although the extra spending did not mean the southern African nation was loading up on debt.

"Even though the budget outlined slightly more spending than had been anticipated, it's still taking place against a backdrop of increased revenue collection, and an effort to raise more meaningful receipts from previously undertaxed sectors," said Razia Khan, head of Africa research at Standard Chartered in London.

Foreign mining firms in Zambia include Brazil's Vale , Canada's First Quantum Minerals and Barrick Gold and London-listed Vedanta Resources and commodity giant Glencore.

Most of the extra spending would go on 45 percent and 27 percent increases for health and education respectively, and a 38 percent boost for a farming subsidy programme that has underpinned nearly a decade of 6 percent-plus annual growth.

"The Patriotic Front (PF) won the 2011 election because it listened to the needs of the people at all levels," Chikwanda said in his budget speech. "Now that we are in government, we have not and will never distance ourselves from the people."

"BALLISTIC"

PF leader Sata, a gruff populist who spent 10 years as opposition leader in the southern African nation, has caused slight nervousness among foreign investors, not least for his vitriolic criticism of Chinese mining firms.

However, he toned down his rhetoric in the latter stages of campaigning, and since coming to office has been at pains to build a working relationship with a sector that accounts for more than 70 percent of all foreign exchange earnings.

However, Chikwanda's budget puts pressure on the mining firms with a doubling of copper royalties to 6 percent -- a hike that looks certain to provoke a furious industry reaction.

"They're going to go ballistic," said Peter Major, a mining analyst at Cadiz Corporate Solutions. "As we've all learned in life, the way to get what you want is to go ballistic, and the sooner the better. This is not going to be touchy-feely."

Chikwanda also said Lusaka would resurrect the previous administration's plans to tap international capital markets to raise infrastructure funds, with the launch of a debut $500 million 10-year Eurobond during the year.

However, he made clear that Zambia, a nation of 13 million people, would not get sucked into unsustainable debt.

"As we spend more on our socio-economic infrastructure, our ability to meet our debt obligations should not be ignored," he said. "In this regard, the government will target concessional borrowing as the first option."

He also assuaged fears of looser monetary policy, saying the Bank of Zambia would continue to target single-digit inflation through its control of money-supply growth -- a move that should support the kwacha currency.

"Investors will be encouraged by this, and we expect the kwacha -- impacted by global volatility in recent days -- to benefit as a result," Khan said.

(sourced Reuters)

ArcelorMittal Announces the Publication of Q311 EBITDA Sell-Side Analyst Consensus Figures on

Press release

Oct.29, 2011

LUXEMBOURG: ArcelorMittal today announces the publication of sell-side analysts' consensus forecasts for ArcelorMittal's Q3'11 EBITDA. The consensus figures are based on sell-side analyst estimates recorded on an external web based tool provided and managed by an independent company called Vuma Financial Services Limited (trade name:Vuma Consensus). The consensus figures together with the full list of sell-side analysts who submitted their forecasts are available on our website.

View consensus figures

ArcelorMittal does not express any opinion as to the accuracy or relevance of this consensus or any component thereof. Any use of or reliance on this data is purely at the risk of the user.

About ArcelorMittal:

ArcelorMittal is the world's leading integrated steel and mining company, with a presence in more than 60 countries.

ArcelorMittal is the leader in all major global carbon steel markets, including automotive, construction, household appliances and packaging, with leading R&D and technology. The Group also has a world class mining business with a global portfolio of over 20 mines in operation and development, and is the world's 4th largest iron ore producer. With operations in over 22 countries spanning four continents, the Company covers all of the key industrial markets, from emerging to mature, and has outstanding distribution networks.

Through its core values of sustainability, quality and leadership, ArcelorMittal commits to operating in a responsible way with respect to the health, safety and well-being of its employees, contractors and the communities in which it operates. It is also committed to the sustainable management of the environment. It takes a leading role in the industry's efforts to develop breakthrough steelmaking technologies and is actively researching and developing steel-based technologies and solutions that contribute to combat climate change. ArcelorMittal is a member of the FTSE4Good Index and the Dow Jones Sustainability World Index.

In 2010, ArcelorMittal had revenues of $78.0 billion and crude steel production of 90.6 million tonnes, representing approximately 6 per cent of world steel output. The Group's mining operations produced 47 million tonnes of iron ore and 7 million tonnes of metallurgical coal.

ArcelorMittal is listed on the stock exchanges of New York (MT), Amsterdam (MT), Paris (MT), Brussels (MT), Luxembourg (MT) and on the Spanish stock exchanges of Barcelona, Bilbao, Madrid and Valencia (MTS).

For more information about ArcelorMittal visit: www.arcelormittal.com .

source: ArcelorMittal

Rio is making piles from ore

By Barry FitzGerald
October 14, 2011

RIO Tinto is set to beat last year's record profit of $US14.32 billion comfortably after latest production figures showed it is well on the way to meeting its 2011 production target for iron ore - its profit mainstay.

The group's third (September) quarter production report, released yesterday, shows that Rio set new quarterly records for iron ore sales, as well as setting records for coking coal production.

Pilbara and Canadian iron ore production for companies owned or part-owned and managed by Rio was 64 million tonnes (Rio's share was 50 million tonnes) in the September quarter, up by 5 per cent on the previous corresponding period.

That took production for the first three quarters of the group's reporting year to 179 million tonnes (Rio's share was 141 million), leaving it requiring output of 61 million tonnes in the final quarter to hit its 240 million tonne target for the year.

The market pushed the stock $1.88, or 2.7 per cent, higher to $69.34. That was more than the 56¢, or 1.5 per cent, gain for BHP Billiton, which has yet to report for the September quarter.

Just as important for Rio in hitting production targets has been the ability of iron ore prices to be largely immune so far from the worst of the commodity price shakedown that has accompanied the equities rout on Europe's debt concerns.

Spot prices for the key steel-making raw material have weakened in the past month by about 9 per cent to $US162 a tonne. But that price is still well above last year's average of $US135 a tonne, ensuring that the bumper earnings from iron ore will continue for some time yet.

Most analysts have Rio earning more than $US17 billion for 2011, indicating a big second half given its profit for the June half was $US7.58 billion. That represented a 30 per cent improvement on the 2010 June-half result of $US5.8 billion.

Rio chief executive Tom Albanese highlighted iron ore's relative price strength in his commentary on the production report lodged with the stock exchange.

''Whilst we are mindful of current market volatility, the fundamentals are holding up well, particularly for bulk-traded [iron ore, coking and steaming coal] commodities,'' Mr Albanese said.

Coking coal prices have retreated recently but the spot price of $US256 a tonne remains well ahead of last year's average of $US217 a tonne. Steaming or energy coal has bucked the trend in recent weeks to edge higher to $US125 a tonne. Last year's average for the commodity was $US98 a tonne.

There were some areas of weakness in Rio's September production report, most notably in the copper division. A combination of industrial action in Chile and Indonesia and lower grades cut copper production by 32 per cent in the quarter from the previous corresponding period.

Sourced smh.com.au

Raspadskaya to miss 2011 coking coal output target by 24pct - Report

Tue, 11 Oct 2011

Russian producer of coking coal OAO Raspadskaya may produce less than 6.5 million tonnes this year, missing its output target by 24% percent, Kommersant reported, citing analysts’ estimates.

Raspadskaya produced 400,000 tonnes of coal a month in July and August versus average 576,000 tonnes a month in the first half, the Moscow-based newspaper said, citing Metal-Courier data.

The company will probably miss its full-year output target of 8.5 million tonnes, according to the newspaper.

Raspadskaya had a market value of about USD 2.2 billion yesterday, while steelmaker Evraz Group SA and Raspadskaya management have been seeking to sell the company for more than $5 billion in the first half of the year, Kommersant said.

(sourced from Bloomberg)

China Coal Prices Face ‘Upward Pressure,’ UOB-Kay Hian Says

Tue,Aug 16, 2011 |By Bloomberg

China’s thermal coal prices face “upward pressure” and may rebound earlier than expected after stockpiles at ports and power stations declined, UOB-Kay Hian Ltd. said.

Demand for domestic coal was reflected in rising freight rates to deliver the fuel from Qinhuangdao port to Shanghai or Guangzhou, Helen Lau, a Hong Kong-based analyst at UOB-Kay Hian, said in an e-mailed note today. Freight costs climbed as much as 3 percent for the week ended Aug. 10 from a week earlier, reversing a downtrend since June, she said.

China’s thermal coal prices typically fall during July through September after power plants complete stockpiling the fuel to meet summer demand. Last year, prices began to rebound in late September as utilities replenished inventories consumed during the peak season, according to data from the Beijing-based China Coal Transport and Distribution Association.

Inventories at the top six Chinese power generation companies have fallen to the equivalent of 15 days of consumption after staying above 17 days since June, Lau said in today’s note. Inventories below 15 days represent supply tightness, she said.

Daily coal consumption at power plants rose to a record in July as electricity demand expanded 12 percent from a year earlier, Cai Hongyu, a Hong Kong-based analyst at China International Capital Corp., the nation’s biggest investment bank, said in a separate e-mailed note today.

China’s thermal coal prices should rebound in September as utilities restock and maintenance begins at Daqin railway, a major coal transportation rail-line, Cai wrote.

ANALYSIS - Riots shake faith in UK austerity, stability

By Peter Apps, Political Risk Correspondent

Wed Aug 10,2011

LONDON (Reuters) - In the eyes of the financial markets, Britain was supposed to be a model of successful, sustainable austerity and a safe haven in which the world's rich could buy houses and stash their savings.

The riots that turned London and some other English cities upside down this week have undermined that model, raising questions about the sustainability of spending cuts and a widening gap between rich and poor.

From many of the dealing rooms and offices in the skyscrapers of Canary Wharf, traders, wealth managers and analysts could see billowing smoke in several directions this week as rioters torched buildings and looted shops.

Order was restored in the capital at least on Tuesday night with a massive show of force by police, but they too face the drastic spending cuts that will affect everything from the military to social benefits and inner-city services.

Britain's coalition government says it remains committed both to cutting a record budget deficit and staying in power until elections due by 2015.

Investors have always had mixed feelings about austerity. They want the British government to tackle the huge deficit to slow its accumulation of debt. But they also fear that cuts will push the economy back into recession, hitting corporate earnings and tax income while raising social spending costs and actually pushing the country deeper into debt.

Nevertheless, they had generally compared British determination to cut the deficit favourably with the indecision or infighting paralysing much policy-making in the euro zone and United States. Now, they are not so sure.

"If you'd asked me at the weekend, I would have said that with the problems of the euro zone and U.S., (Britain's) sterling (currency) might be poised to become an appealing safe haven," said Simon Derrick, head of foreign exchange at the London branch of Bank of New York Mellon.

As he spoke, from his dealing room Derrick could still see smoke on the horizon from a distant burning warehouse. "This has certainly shaken that... it's probably still too soon to say what it means for policy, but it certainly makes austerity look more difficult."

The short-term market impact looks to have been limited. Derrick said U.S. media coverage of the London riots prompted a modest sell-off in the pound late on Tuesday, but markets have largely shrugged off the violence.

Indeed, the cost of insuring Britain's debt in the credit default swaps market edged below that of Germany this week for the first time -- with investors clearly believing worries that Germany might have to bail out Italy and Spain outstripped concerns about Britain.

After unexpected uprisings shook the Middle East and North Africa earlier this year, wealth managers say billions were transferred to London in particular as nervous regional leaders and business elites raced to move their wealth to safety.

Attracted by a reputation for stability and the opportunity for a luxury lifestyle -- as well as a strong legal system and systems allowing them to conceal their wealth through trusts and other structures -- they bought property and other assets.

But this week's events have undermined London's safe haven appeal and some analysts expect louder calls for both tighter controls on unfettered wealth and a rethinking of planned cuts.

Some countries such as Latvia and Ireland have pushed through massive cuts with relatively little unrest but not everyone can pull off the same trick. The British riots could point to similar risks in other European and U.S. cities as cuts start to bite.

ONLY THE BEGINNING?

"I don't think the implications of this have been fully thought through or accepted yet," said Pepe Egger, western Europe analyst for London-based consultancy Exclusive Analysis.

"What we have here is the result of decades of growing divisions and marginalisation, but austerity will almost certainly make it worse. Yes, the police can restore control with massive force but that is not sustainable either in the long term. You have to accept that this may happen again."

Speaking to Reuters late on Tuesday, looters and other local people in east London pointed to the wealth gap as the underlying cause, also blaming what they saw as police prejudice and a host of recent scandals.

Spending cuts were now hitting the poorest hardest, they said, and after tales of politicians claiming excessive expenses, alleged police corruption and bankers getting rich it was their turn to take what they wanted

"They set the example," said one youth after riots in the London district of Hackney. "It's time to loot."

Unsurprisingly, the criminality produced a swift popular backlash. Vigilante groups patrolled some streets, while media and social networks were deluged with demands for tough action.

This itself could pose one of the greatest initial challenges to spending cuts. Prime Minister David Cameron made it clear all necessary resources would be available to the police, but the government also says it will still stick to its plans to cut police spending by roughly a fifth.

POLICE CUTS CHALLENGED

That contrasts with the 1980s approach of Margaret Thatcher, who slashed public spending and took on trade unions in the face of unrest but ploughed money into the police and military.

Support for police cuts is dwindling. London Mayor Boris Johnson, a leading member of the ruling Conservative party, called on Wednesday for them to be watered down.

Analyst Louise Taggart at security consultancy AKE said that in time urban unrest worries could make it harder to cut other programmes as well, including sorely needed education and community services. It went well beyond Britain, she said.

"Across Europe, we've already seen some incidence of civil unrest," she said, saying it would almost inevitably impact policy. "There's definitely a likelihood that similar scenes might erupt when austerity cuts really start to be felt."

If slashing spending is less of an option, Western states may have little option but to pursue ever more rounds of quantitative easing, effectively printing money whilst keeping benefits, wages and spending programmes largely static.

That could bring its own problems -- not just inflation hitting the savings of the rich and the buying power of the poor but also increased tensions between Western states and emerging economies such as China that hold their debt.

"The most likely path from here is for no changes being made and moving into inflating the debt away -- unfortunately" said Steen Jakobsen, chief economist at Saxo Bank.

However, he warned that this alone would not restore social or financial stability without more fundamental systemic change. "For a society to grow and move forward all social classes need to benefit from growth," he said.

(sourced Reuters)

Japan Feb crude steel output +5.7 pct yr/yr,March fall seen

Fri Mar 18, 2011 5:42am GMT

* February output up 5.7 pct yr/yr
* Output down 7.5 pct from Jan, when Sumitomo came back
* Analysts expect further output fall in March

TOKYO, March 18 (Reuters) - Japan's crude steel output rose 5.7 percent in February from a year earlier to 8.93 million tonnes, the Japan Iron and Steel Federation said on Friday.

Output, which is not seasonally-adjusted, declined 7.5 percent from January.

January's strong month-to-month output increase was due to a production boost by Sumitomo Metal Industries Ltd, Japan's No.3 steel mill, whose production was affected by troubles at its blast furnace in November and December.

Analysts expect Japan's crude steel output for March to drop further following the disruption to operations after the disastrous earthquake that hit eastern Japan on March 11.

Japan's big two Nippon Steel Corp and JFE Holdings Inc have resumed operations of blast furnaces idled after the quake since Sunday, but government-imposed power cuts are expected to sharply reduce their production in March.(Reporting by Yuko Inoue; Editing by Ed Lane,sourced Reuters)

Port Hedland iron ore shipments tumble in seasonal drop

Thu Mar 10, 2011 4:22am GMT

* Chinese New Year probably biggest factor in drop

* Cyclone, shorter month also weighed

SYDNEY, March 10 (Reuters) - Iron ore shipments from Australia's Port Hedland, one of the world's largest export terminals, fell 16 percent in February, but the drop was mostly due to seasonal and weather-related factors, and analysts expect a rebound in March.

Iron ore shipments dropped to 12.85 million tonnes in February from 15.33 million in January and 17.33 million in December, the port said on Thursday, but analysts suggested the chief culprit was a holiday in China, the biggest destination of the port's shipments.

"It's all seasonal with the Chinese New Year when you've got a week or so with not too many (customers) to trade with," said Tom Price, a commodity analyst with UBS.

"A better signal is the spot price, which was quite strong, indicating solid demand."

Officials at Port Hedland, which is used by BHP Billiton and Fortescue Metals and shipped more than 180 million tonnes of iron ore in 2010, pointed out that the port was closed for several days in February due to tropical cyclone Carlos and that the unadjusted figures also do not reflect the shorter month.

Iron ore shipments a year earlier dropped around 2 million tonnes in February, but made up nearly all of the loss in the following month.

February exports from Port Hedland to China fell to 9.03 million tonnes from 9.97 million in January while exports to Japan nearly halved to 1.47 million from 2.82 million.

China's iron ore imports in February reached 48.64 million tonnes, down 29.5 percent from a January record, with trade disrupted by the Lunar New Year, China's customs agency said in a statement on Thursday.(Reporting by Balazs Koranyi Editing : Himani Sarkar, sourced Reuters)

Tags : China's iron ore imports in February, steelmaking

U.S. flat-rolled steel prices edge $5/st higher on decent demand

Thu,Mar10, 2011 10:22 By Platts

More spot deals came to light Wednesday in the US flat-rolled market, pushing up by $5/st both of the Platts assessments for hot- and cold-rolled coil supplied by domestic mills.

The range of deals assessed by Platts for US-made HRC fell within a wider spectrum of $850-880/st, resulting in a higher midpoint of $865/st ex-works Indiana, with lead times reported at four-to-six weeks by active buyers.

Lead times for cold-rolled coil were two to three weeks longer at most mills, sources said, and the CRC price reached a midpoint of $970/st ex-works Indiana.

"Several mills are starting to look at May," said a major Chicago-based buyer, "and one reason is because ArcelorMittal has very little spot availability for April." He reasoned that ArcelorMittal's contract business has been strong thanks to automotive, leaving fewer tons for the spot market.

Auto sales, inventory and production in the US all look like they will support steel demand, according to Josh Spoores, chief analyst at Ohio-based Steel Reality.

"Production [automotive] has increased and should continue to increase," Spoores notes. One note of caution is for light-weight trucks. He explained that year-to-date truck sales are 29% higher than in 2010 "and the current price surge of gasoline may start to slow truck sales going forward."

Spoores maintained Wednesday that the leading steel indicators continue to show firming demand from manufacturing in general and even construction.

"Construction is now driven by seasonal pressures, though the impact has largely been accounted for," said Spoores. "Without solid gains to come, construction will likely revert to neutral over the next month." He added that manufacturing is generally strong with some leading indicators pointing toward the positive.

He sees supply-side pressures, however, as a negative and believes the inventory cycle is poised to slow.

KEY WILL BE INVENTORY BUILDING...OR NOT: ANALYSTS

"Inventory building has been masquerading as demand," Spoores said. "Prices have increased rapidly, while this source of demand is set to slow. In price cycles of the past, when inventory building slows, prices fall regardless of other demand."

But the analysts at Cleveland Research provided an opposing perspective in a Wednesday report: "Steel inventories remain depleted throughout most steel channels. The distributors are holding minimal inventories [about 8 million st] ... Assuming the consumption environment is getting better, there will be a push for distributors to catch up on the inventory side, compounding the upside to mill volumes in 2H11."

Cleveland Research maintains that domestic steel mills and distributors could see more upside beyond the normal seasonal trading.

"April could represent a new period for higher steel prices, at least until the new supply comes into focus," Cleveland Research said. The analysts' steel industry macro-model assumes 7-8% consumption growth this year, meaning "there may be upside to our 93 million [short] tons demand outlook."

Still, their model uses an average 2011 spot-market price for hot-rolled coil of $730-740/st, which they note "is below the existing transaction values. This is based on an average scrap cost of $425 per ton, which is also below the current price point."

Since January 3, the Platts assessment for US-made hot-rolled coil has averaged $792/st ex-works Indiana -- so future spot deals would have to move much lower if they are to align with the Cleveland Research forecast.

Spoores seems to think the pricing peak is closer.

"Current indicators are calling for a likely price peak and short, but swift decline, before further gains are seen later this year," he said.

Greek PM seeks consensus on economy in meetings with opposition party leaders

Wed, Mar08, 2011 23:55:28

ATHENS, March 8 (Xinhua)-- Prime Minister George Papandreou said Tuesday he will seek national consensus on dealing with the Greek debt crisis in a series of meetings with opposition parties and through a "comprehensive package solution" in the European Union.

"We need responsibility from all political forces. We are determined to support in Brussels that the only solution on the current crisis in Greece and Europe is a comprehensive package solution. Otherwise, there is no solution. On this basis I will fight," Papandreou said during talks with main opposition New Democracy (ND) Party leader Antonis Samaras.

Stressing that his government respects different views, the prime minister asked that parties on the right and left support his stance ahead of a crucial extraordinary summit of eurozone-member states Friday in Brussels and the March 24-25 EU summit.

Samaras on his part, noted that the ND always stood for national consensus in difficult times. He repeated his party's stance that Greece should change policies and re-negotiate terms of the memorandum signed last May with the EU and International Monetary Fund in order to secure a multi-billion euro rescue package to avoid default.

Local analysts expect similar responses in separate meetings later Tuesday from the leaders of other parties represented in parliament, such as the Greek Communist Party (KKE) and the Popular Orthodox Rally (LAOS).

Papandreou was also scheduled to hold talks with non-parliamentary Democratic Alliance and Democratic Left parties' leaders later Tuesday, before flying to Paris to meet French President Nicolas Sarkozy on Wednesday ahead of the EU summits.

Experts in Athens said that during talks with Sarkozy, Papandreou likely would try to secure support to convince German Chancellor Angela Merkel to accept an extension of the repayment period of the EU-IMF aid by Greece and lower interest rates.

During a cabinet meeting Monday, Papandreou stated his intention to seek a "comprehensive package solution" for the crisis in Brussels, leaving open the prospect of using veto power to block any other solution, clashing with Germany. Editor: yan

EU summit to take only minor steps on debt crisis

Mar8, 2011, 10:13 PM

By Luke Baker

BRUSSELS (Reuters) - Euro zone leaders will take the next cautious steps in their year-long effort to quell the region's debt crisis at a summit on Friday, but the meeting is unlikely to produce a breakthrough.

The top item on the agenda for the 17 heads of state and government is to agree a "competitiveness pact", a deal Germany and France are pushing the rest of the euro zone to adopt to show their commitment to overhauling their economies.

The pact has been watered down since it was put forward by German Chancellor Angela Merkel and France's Nicolas Sarkozy last month, and now looks likely to win approval from the rest of the euro zone leaders, many of whom were alarmed by the initial proposals.

The more stringent elements, such as a commitment to abandon inflation-linked wage increases, are likely to be dropped, but there should be agreement on measures to limit public deficits, gradually increase retirement ages to reflect demographics, and work towards a common corporate tax base.

Any agreement is likely be hailed by EU leaders -- particularly Germany and France -- as a major step forward in the battle to stem the debt crisis, which has already led to bailouts for Greece and Ireland and still threatens Portugal.

But analysts regard competitiveness as a sideline issue that barely nudges the euro zone closer to tackling the fundamental problems underpinning the crisis -- bad banking debts and heavily-indebted sovereign nations with poor growth prospects.

"The competitiveness pact as it stands is largely meaningless, it's beside the point right now," said Simon Tilford, chief economist of the Centre for European Reform, a London-based think tank.

"The immediate issue is debt restructuring and bank recapitalisation and they're not dealing with that."

Friday's summit is only likely to lay the ground for a meeting of all 27 EU leaders in Brussels on March 24-25, when they hope to agree on a "comprehensive package" of measures they hope will draw a line under the crisis.

PORTUGAL BACK UNDER PRESSURE

Measures under discussion as part of the comprehensive package include reforms to the European Financial Stability Facility (EFSF), the 440 billion euro fund set up last May and used to bail out Ireland, and the creation of the European Stability Mechanism, a permanent fund that will replace the EFSF from mid-2013, and more banking stress tests.

Among issues to be resolved is whether the effective capacity of the EFSF will be increased to its full 440 billion euros. Because of guarantees needed for the fund to retain its triple-A credit rating, its effective capacity is currently 250 billion euros.

If Germany gets the rest of the euro zone to sign up to the competitiveness pact on Friday, there is an expectation that that will make Berlin more disposed to agree to a strengthening of the EFSF, which almost all other euro zone members want.

But Merkel's political allies at home are adamantly opposed to bolstering the EFSF, which would require more taxpayer-backed guarantees, and neither do they want the fund to be used to buy distressed euro zone debt, as many other countries favour.

Merkel's coalition lost an important regional election in Hamburg last week and is expected to lose another in Baden-Wuerttemberg on March 27, piling pressure on the chancellor to stick closely to what voters want, which is no more German taxpayer funds being used for EU bailouts.

A month ago, an enlargement of the effective lending capacity of the EFSF looked likely, as did the possibility of the fund being used to buy distressed euro zone bonds on the secondary market, or to lend money to countries such as Greece and Ireland to buy back bonds. All now look questionable.

"The wiggle room, the political room for manoeuvre on the part of the Germans, is worryingly limited," said Tilford.

"They are going to have to deliver something (on March 24-25) because the market reaction otherwise could be pretty adverse, but I fear that very little is going to be delivered."

European leaders, particularly Herman Van Rompuy, the president of the European Council, have cast the end-March summit as a defining moment, when the euro zone finally gets on top of a crisis that has wrought turmoil for more than a year.

But because of German domestic politics, persistent disagreement among member states over the best course of action, and external factors such as the likelihood that the European Central Bank will raise euro zone interest rates next month, the crisis may be about to enter another, more uncertain phase.

For months Portugal has said that it does not need EU/IMF assistance and can continue to fund itself in the market. But if there is no breakthrough on March 24-25, the likelihood of Portugal needing a bailout will increase. Already the majority of EU states believe this will happen in April.

That points to a renewed round of pressure on the debt of peripheral or highly-indebted euro zone states, with not only Portugal, but Spain, Belgium and Italy in the picture.

"Portugal will be forced into a bailout and will subsequently, like Ireland and Greece, be forced to restructure its debt," said Tilford. "Portugal looks very vulnerable."

(Editing by Stephen Nisbet,sourced:Reuters)