Daiichi Chuo Targets U.S. Coal Export Boom as It Adds Bulk Ships

Monday, 06 February 2012

Daiichi Chuo Kisen Kaisha (9132), a Tokyo- based shipping line, said it’s targeting a boom in coal exports from the U.S. as shale gas production frees up the fuel for sales overseas. The shares were poised for their biggest gain since at least 1974.

“Exports of coal from the U.S. could easily double in the next three or four years,” Saburo Koide, president of the company, said in an interview in Tokyo yesterday. “We’ve already had several inquiries on shipping coal from there,” he said, declining to name potential customers.
The shipping line plans to add an office in Brazil as early as next month to handle imports to South America, expanding its overseas branch network that includes China and India, Koide said. The U.S. can boost coal exports as much as 110 million tons by this year as low natural gas prices erode the fuel’s domestic demand, the International Energy Agency said last month.
“We’re going to see more bulk ships traveling to the U.S.,” Koide said. “China and India are already strong markets for coal. Brazil is also expanding.”

Daiichi shares climbed 25 percent, headed for the biggest gain since at least September 1974, to 141 yen as of 1:37 p.m. in Tokyo. The Nikkei 225 Stock Average rose 1.1 percent.
Shale Rock
The development of shale gas reserves in the U.S. is reducing the country’s reliance on coal for power stations, opening the way for the fuel to be exported. The U.S Energy Department forecast coal’s market share for power generation will decline to 43.5 percent this year from 44.9 percent in 2011, according to Simmons & Co. International.

Marcellus shale rock formation, stretching across the U.S. Northeast, has enough reserves to meet the nation’s gas demand for about six years, according to estimates from the Energy Department. Global coal demand may expand 2.8 percent a year to 2016 amid demand from emerging economies, the Paris-based International Energy Agency said last month.
“Demand for coal from developing countries is increasing as their populations and economies expand,” Koide said. Daiichi already has won some contracts to transport coal from the U.S., he said.
Daiichi plans to expand its fleet to 280 ships by the end of March 2016, from 195 vessels in March, according to the company’s mid-term forecast. The shipping line plans to add 111 vessels including capesizes and panamaxes in this period.

In comparison, Mitsui O.S.K. Lines Ltd. (9104), operator of the world’s largest merchant fleet, had 917 ships at the end of March, according to its annual report. The shipping line is the largest shareholder of Daiichi with a 26 percent stake, according to data compiled by Bloomberg.
Daiichi will make a loss of 3.8 billion yen ($49 million) on sales of 148 billion yen in the year ending March 31, the company said in October. It’s scheduled to announce earnings for the third quarter on Jan. 31. Koide declined to comment on the company’s earnings forecast.
Source: Bloomberg

South African Coal Exports to India Slump 24% in 11 Months, Mjunction Says

Thursday, 05 January 2012

India’s imports of coal (CCAIIQTL) from South Africa fell in the first 11 months of 2011, while China almost doubled purchases, according to Mjunction Services Ltd.India bought 14.39 million metric tons of the fuel from South Africa, down 24 percent from 18.96 million in the same period a year earlier, India Coal Market Watch, a unit of Mjunction, said in an e-mail dated yesterday. Purchases in November fell 21 percent from the previous year to 1.29 million tons.

South Africa’s shipments to China, the world’s biggest coal consumer, rose 88 percent to 12.26 million tons in the first 11 months of 2011, India Coal said in the note. November sales increased more than threefold to 2.84 million. India’s imports accounted for 25 percent of the 57.4 million tons from South Africa through November last year, according to Bloomberg calculations based on data from Mjunction and the Richards Bay Coal Terminal website. China accounted for 21 percent of the shipments.

Prices (CLSPSARB) at Richards Bay fell to $105.74 a ton as of Dec. 30 from $105.95 a ton a week earlier, according to data from Petersfield, U.K.-based researcher IHS McCloskey.
Kolkata, India-based Mjunction is a joint venture between Tata Steel Ltd. and Steel Authority of India Ltd.
Source: Bloomberg

Indonesian minister calls for coal exports restrictions

Tuesday, 06 Dec 2011

Indonesia’s enterprises minister Mr Dahlan Iskan has urged for the limitation of coal exports in order to secure enough coal for domestic needs.

The minister during a National Energy Policy seminar at the House of Representatives building said that “Let’s not be all about profit.”

If the policy cannot be issued, Mr Dahlan suggested that the government prepare a location for coal resources which holds reserves enough for 200 years. “In Indonesia, wherever it is Kalimantan, Papua, Sumatra, or somewhere else.”

Mr Dahlan proposed that energy consumption pattern be switched from oil fuel to coal. Oil production tends to decline with gas production has a high potential.

Mr Dahlan added that “Vehicles from trucks to bajaj should convert from oil fuel to compressed natural gas.”

(sourced Tempointeractive.com)

Transnet moves to scheduled rail service

Thursday, 17 Nov 2011

South African freight logistics group Transnet said that it was rolling out a scheduled railway service that would stick to strict timetables, replacing its current system in which trains only depart when they are loaded.

Transnet plays a key role in Africa's largest economy, moving crucial coal exports to the Richards Bay Coal Terminal for movement to growing Asian markets.

Transnet in a statement said that "Given the fact that Transnet Freight Rail is running without much excess capacity, better planning and scheduling tools are needed to effectively manage the scarce resources, in order to cope with the rapidly increasing demand for railway transportation.”

Spokesman Mr Sandile Simelane said the group was aiming to have the schedule in place across the board by the middle of next year but it has launched fixed scheduling for four corridors: Phalaborwa/Maputo & Richards Bay for magnetite, Welgedag/Palmford for Majuba Coal, Uitkyk/Komatiepoort for TCM Coal and Phalaborwa/Richards Bay for rock phosphate.

The current system, known as tonnage-based dispatching, was aimed at minimising the total number of trains needed by maximising their size but Transnet said that “In practice it disrupted the efficient utilisation of crews, locomotives and equipment."

Mr Simelane said the new system would be run like an airline: customers would have to be on time or else the plane would leave without them instead of waiting until it was full.

(Sourced from Thomson Reuters)

South African coal export prices fall to lowest in nearly a year

Wednesday, 16 Nov 2011

According to data on Bloomberg from researcher IHS McCloskey, coal export prices at Richards Bay, South Africa, the continent’s biggest terminal for shipping the fuel, fell to the lowest level in almost a year.

Prices decreased USD 1.83, or 1.7% last week to an average USD 106.30 a metric tonne, the least since November 26th 2010, following a 1.2% decline in the week ended November 4. The price quoted is on a free on board basis, excluding delivery costs.

(Sourced from Bloomberg)

US coking coal exports in September slip

Monday, 14 Nov 2011

According to data from the US Department of Commerce, US coking coal exports excluding shipments to Canada slipped 0.3 million tonne on August to 4.8 million tonne in September. This marks an increase of 1.5 million tonne year on year.

The department said that coking coal exports to China saw a significant recovery, up 57% month on month to a 6-month high of 0.5 million tonne. By contrast, exports to South Korea and Japan both declined to 0.2 million tonne and 0.4 million tonne respectively.

(sourced from ssyonline)

Russian coal output rises in first nine months

Friday, 07 October 2011

According to the State Statistics Committee of Russia (Russtat), in the January-September period of the current year Russia produced 240.412 million mt of coal, up 2.8 percent compared to the same period last year. In September alone, Russia increased its coal output by 5.2 percent year on year to 27.8 million mt.

According to the data for the first nine months of the current year, Russia's coal exports increased by 9.5 percent year on year to 79.63 million mt. In September alone, Russia exported 8,49 million mt of coal, up 2.8 percent compared to the same month last year.

Tags: coking coal , raw mat , Russia , CIS , production , mining
(sourced steelorbis)

Indonesia Medco to start coal output for China demand

Thursday, 08 Sep 2011

Reuters reported that Indonesia largest listed oil firm, Medco Energi will start to produce coal this year aiming for 500,000 tonnes of output by end-2011 to ship to China.

Mr Arie Prabowo Ariotedjo head of its mining unit said "This will be our first coal production project. We are selling it to China through a European trader, adding that its field at Nunukan in Eastern Kalimantan province will start production in three months.”

He said that the firm aims to lift production to 1 million tonnes a year by 2014. Coal output in Indonesia, the world top exporter of thermal coal is estimated to grow at least 10% annually over the next five years with industry groups expecting production to reach 340 million tonnes this year.

The mine at Nunukan is on a 6,500-hectares site and has proven source of 8 million tonnes of coal. Medco is also looking to acquire other coal sources and is ready to inject USD 18 million for the first phase of production.

Medco whose main energy activity centres on oil and gas will join the ranks of Indonesian coal firms such as Asia top thermal coal Bumi Resources which expects to produce 66 million tonnes of coal this year.

(Sourced from Reuters)

China to issue 2nd batch of coal export quotas for 2011

Tuesday, 06 Sep 2011

The National Development and Reform Commission will soon release the second batch of coal export quotas for 2011 totaling 20 million tonnes.

The coal exporting enterprises involved include China National Coal Group Corp., Shenhua Group Corporation Limited, China Coal Import & Export Group Co Ltd and China Minmetals Corporation.

(source steelhome)
China steel information centre and industry database

Vale Mocambique to start exporting coal from Moatize in August

Monday, 22 Aug 2011

macauhub reported that Mozambican subsidiary of Brazilian mining giant Vale, Vale Moçambique is due this month to start exporting coal mined in Moatize, Tete province, to the European market.

The report cited Mr Vanessa Bernardo coordinator of Vale communication and development office as saying that within the next few days a ship would dock at the port of Beira that will carry the coal that started being transported last week from the mine to the coal terminal at the port along the Sena railroad.

The Moatize coal mine, in the coal basin of the same name, which in this first phase involves investment of USD 1.658 billion, will produce 11 million tonnes of metallurgical and thermal coal per year and the latter will also be used for the company’s own consumption to fire its power plant and to link up to the Mozambican national grid.

Brazil’s Vale, which set up in Moatize in 2004, has a concession on one of the world’s largest coal reserves and the company expects positive results in the near future.

The Moatize project which is currently Vale’s largest investment in the coal sector, is part of the group’s strategy to become a benchmark in the world coal sector and it also has a portfolio of mining projects in Australia and Colombia, as well as minority stakes in two partnerships in China.

(sourced Macauhub)

Indonesia's proposed Low Grade Coal Export ban will not have a significant impact on India-Miswin Mahesh

Thu, 18 August, 2011

The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5100 kcal/kg (on adb basis) in value. As of now Indonesia is not producing much coal containing below 5100 GAD coal. But according to industry, by 2014, the total production of below 5100 GAD coal could reach up to 10 – 20 million per annum.

Indonesia coal export ban
“We do not see a significant impact from the loss of low grade Indonesian volumes”, said Miswin Mahesh, an analyst at Barclays Capital in London.

These volumes have been preferred by Indian consumers increasingly over this year given its price advantage over the high spec variety of coal; this would just mean that more of the high spec coal will be drawn in by end users, he futher added.

India will have to start importing higher grade coal at the prices that prevail in 2013 (and we expect these to come from South Africa and Australia). Major supply centres are shaping up well to provide future supplies; example SUEK in Russia is expanding its Muchka Bay terminal at Vanino, which is expected to become the largest coal port in Russia in order to boost Russia’s exports to the Pacific Basin.

SUEK is investing heavily in this terminal and its capacity will be increased to 12mt/yr. Further supply ramp ups from Russia expected from Vanino as Mechel is also completing the construction of the rail line connection the national railway network to the Elga deposit.

Production is expected to ramp up to about 25mt/yr over the next decade. We don't think the Russian governments export duty stance on SS coal will have a significant impact on its exports, and given that Colombian supplies are increasingly finding their way into Europe, Russian exporters will be increasingly incentivized on sending their cargoes to Asia. And given that they are well prepared for this we would not see any significant loss of supply.

Another important trend noticed is the directional share of Indonesia’s exports where India’s share of imports have increased over China’s (an expansion of close to 40-45% y/y looking at volumes in the first quarter)

Overall view for coal
Barclays Capital expects a lacklustre Q3 2011 for coal markets globally, with large stockpiles in Europe’s (Amsterdam Rotterdam and Antwerp ports), comfortable stockpiles in China and India out of the market due to the monsoons.

These stockpiles will create a buffer for prices at current levels against any unexpected supply or demand incidents.

We expect some momentum to be gained into Q4, as winter restocking needs in Europe return (UK utility stockpiles are low) and German demand will intensify in order to offset the loss of nuclear loss. This will create a good pull for coal in the Atlantic with most of the supplies likely to come from Colombia, Russia, the US and South Africa.

South African prices will have to come off from current levels if it is to price into Asia through this quarter, especially if it is to be attractive to Indian consumers. We would expect India to continue to prefer off spec coal Indonesian coal until South African prices soften, but if Indonesian off-spec becomes expensive then South African coal would climb above the preference scale. Favourable freight rates will also support this movement. We expect South African volumes into India to increase but as mentioned prices have to soften by $10. Low spec South African coal will not be exported into India in large quantities as state owned Eskom requires this supply. We did see some low spec South African cargoes that were meant for Eskom going into India but these volumes are one off in nature.

About Miswin Mahesh
Miswin Mahesh is a commodities analyst at Barclays Capital in London, specializing in the coal, freight and crude oil markets. Miswin is a graduate of the Duisenberg School of Finance in Amsterdam.

He graduated with a double masters, an MSc in Corporate Finance and Banking and a Masters degree in International Finance from the University of Amsterdam. Miswin builds his insight on international trade flows from his experience in the Middle East, India, Africa and Europe.

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(sourced Coalspot)

U.S. may increase coal exports to Europe - Macquarie

Sunday, 14 Aug 2011

Macquarie Group Limited said that the U.S. may increase coal exports, further boosting supply of the commodity in Europe.

Mr Hayden Atkins, an analyst in London at Macquarie's commodities unit, said that "A big push to encourage natural gas burning in the U.S. may drive up coal exports to Europe, China and India."

According to a report on the website of the U.S. Energy Information Administration, the closing of Germany’s nuclear plants will increase demand in that nation. U.S. steam coal exports to Europe in the first quarter more than tripled from a year earlier to 4.9 million tonnes from 1.5 million tonnes.

U.S. coal exports are at their highest level since 1992. Exports to the Netherlands jumped to 1.1 million tonnes from 334,628 tonnes. Shipments to Germany went to 899,009 tonnes from 166,314 tonnes. Trade to the UK rose to 852,159 tonnes from 159,280 tonnes.

Merrill analysts including Mr Sabine Schels in London said that switching to natural gas from coal in U.S. power generation will accelerate in 2012 because of new Environ mental Protection Agency rules to cut emissions of sulfur dioxide and nitrogen oxides, Bank of America Merrill Lynch said July 19th 2011. The Cross State Air Pollution Rule requires 27 states in the eastern U.S. to cut sulfur dioxide emissions by 73% and nitrous oxides by 54% by 2014 compared with 2005 levels.

(sourced Bloomberg)

Polish coal exports down in H1

Monday, 25 Jul 2011

Polish coal exports fell sharply in the first half of this year, as the country's production continued to decline and domestic demand increased.

Poland's leading exporter Weglokoks exported 4.3 million tonne in the first half of this year, just half the level of its exports in the same period one year earlier. The decline represents a major U turn from the upward trend in Polish exports last year, with total exports rising by around 30% to 8.7 million tonne. The decline has affected all types of coal, but thermal coal exports were hit particularly hard.

The Polish firm said that Weglokoks shipped only 2 million tonne of thermal coal in January to June, a 54% decline year on year. Exports of coking coal declined less dramatically by 27% year on year to 389,000 tonne.

According to Weglokoks figures, in terms of transport, the decline in exports particularly affected seaborne deliveries but rail transport also fell. Seaborne deliveries dropped by 62% on the year to less than 1.2 million tonne. Rail shipments declined by 35% to 840,000tonne.

According to Polish economy ministry figures, the trader is declining shipments as it receives less coal from domestic producers. Polish coal production fell by 5% on year in January to April this year with the decline mainly affecting thermal coal.

(sourced ArgusMedia)

NZ's Lyttelton Port lifts force majeure on coal experts

Fri Mar 11, 2011 5:00am GMT

WELLINGTON, March 11 (Reuters) - New Zealand's Lyttelton Port lifted force majeure on coal shipments from state coal miner Solid Energy, the company said on Friday.

Force majeure was imposed after the port's facilities were damaged in the Feb 22 earthquake, which struck the country's second biggest city, Christchurch.

The port company, which exports around 2 million tonnes of coal annually, said the lifting of the notice was conditional.

"LPC is not able to currently meet the minimum loading rates and the minimum depth alongside the berth that are set out in the coal handling agreement," it said in a statement.

State-owned Solid Energy had also declared a force majeure notice to its export customers.

Force majeure is a contractual clause that allows companies to miss deliveries because of circumstances beyond their control.(Reporting by Gyles Beckford, sourced:Reuters)

INDIA'S SIMHAPURU TARGETS S.AFRICAN COAL

Feb08,2011
Economic Times reported that, India's Simhapuri Energy , a unit of the Madhucon Group , wants to buy new or existing collieries in South Africa from where it aimed to export a minimum of 5 million tonnes within five years, an official said on Tuesday.
ET furhter reported that, Indian companies are buying coal assets in top five global exporter South Africa as it moves to secure resources for a growing economy and to feed coal into new power plants.

"We want to invest in coal and are looking at some acquisitions. From South Africa we are targeting a minimum of five milion tonnes of coal for export within five years," Nama Krishnaiah, director of Simhapuri Energy, told Reuters on the sidelines of an African mining conference.
Displacing Europe, India and China are emerging as the two main destinations for coal from South Africa, which last year shipped some 63 million tonnes of thermal coal.
Maducon Group has interests in the construction, coal and sugar industries, with Madhucon Projects listed in Bombay.

Krishnaiah said the company, which recently opened offices in Johannesburg, was in discussions with unnamed junior miners, as well as applying directly to the Department of Mineral Resources for mining licenses.
"At this moment we are targeting some brownfield projects that have mining licenses, but we are looking at greenfield (developments) also," said Krishnaiah, adding that Zimbabwe's coal fields were also attractive.

He said the company, which was developing a 1,920 megawatt power plant near India's Krishnapatnam port, was financially strong and had capital to purchase coals assets.
The company already owns coal mines in Indonesia. (Source:Economic Times)
Tags:Feb 2011, India, Simhapuri Energy, Madhucon group, buy, new or existing colllieries, South Africa, China, Zimbabwe coal fields, coal export, Krishnapatnam port

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Xstrata's thermal coal down, but coking up

Reported by AAP
Wednesday, February 2, 2011

Anglo-Swiss mining giant Xstrata has attributed a dip in Australian thermal coal production in 2010 to the Queensland floods and the planned closure of a mine in NSW.
Xstrata, the world's largest exporter of thermal coal, which is used to generate steam for electricity, produced 37.8 million tonnes (Mt) of the commodity in Australia in calendar 2010, down from 41.1 Mt in 2009.

"Australian thermal coal production for 2010, including semi-soft, was 2.9 million tonnes, or six per cent, below 2009 production," Xstrata said late on Tuesday.
The output fall was primarily due to the planned closure of the United underground colliery in NSW and the impact of severe weather during the first quarter and in December on the Queensland open-cut operations.
However, volumes of coking coal - used in blast furnaces in the production of iron - from Xstrata's Australian mines rose substantially to 7.7 Mt, from 6.4 Mt previously.
"Australian coking coal volumes increased by 20 per cent, or 1.3 million tonnes, as a result of a full year of production from Oaky number one (in Queensland) and high productivity from Oaky North," Xstrata said.
That increase would have been greater if not for industrial action at the Tahmoor mine in NSW in the second half of the year, when workers led by the Construction Forestry, Mining and Energy Union went on strike, calling for wage increases.
The company also announced it had completed construction of a magnetite base plant at Ernest Henry mine, in central Queensland, as part of a $589 million undertaking to transform the project into a major underground copper-gold operation.
The plant had produced its first magnetite iron ore concentrate, an important by-product of the copper-gold concentrating process, Xstrata said.

Magnetite output is expected to be at a rate of about 1.2 Mt per annum, with exports expected to start from Townsville port in the first half of this year.
Ernest HenryMining general manager Myles Johnston said the plant would play a major role in extending the life of the project to at least 2024.
"The transformation of open pit mining operations to a major shaft underground mine is on budget with the shaft scheduled to be commissioned in the first quarter of 2013," Mr Johnston said.
Xstrata mined 74,595 tonnes of copper at Ernest Henry in 2010, up from 35,562 tonnes previously.
The mine also yielded 91,259 tonnes of gold, up from 45,227 in 2009.
Xstrata said a four per cent lift in its total global gold production in 2010 was due to a strong recovery in gold production at Ernest Henry.
Xstrata has activated preliminary emergency procedures as powerful Cyclone Yasi hits Queensland, with nickel production suspended from the 30,000 tonnes per year Yabulu nickel refinery.

South Africa Wants State to Play Role in Coal Mining

February 02, 2011, 7:40 AM EST
By Mike Cohen

Bloomberg-South Africa’s government wants a state-owned mining company to have coal interests to help ensure power utility Eskom Holdings Ltd. can secure supplies of the fuel, Mineral Resources Minister Susan Shabangu said.
“Coal is a strategic asset,” Shabangu told the McCloskey South African Coal Exports Conference in Cape Town today. “We need to grow our economy, we need energy in general. It becomes important for the state to play a role there. We are looking at 18 months” to clarify the role the mining company would play.

Eskom, which generates 95 percent of power in Africa’s largest economy, has called on the government to develop a coal export policy that will guarantee it sufficient, affordable supplies as exports become more lucrative for producers. BHP Billiton Ltd., Xstrata Plc and Anglo American Plc are among the biggest coal producers in South Africa, which generates about 93 percent of its electricity from the fuel.
“It is not the government’s intention to enter the minefield of specifying all the processes and it is our fervent hope that the industry will recognize the particular challenge and work with us,” Shabangu said. “We reserve the right to take corrective measures should the situation demand it. A balance has to be found between pursuing the principles of free market while taking into account the needs of the country.”
Eskom burned 123 million metric tons of coal in its last fiscal year. Recent floods in Australia have bolstered demand for South African coal, and pushed up international coal prices.

‘Australian Misfortunes’
“Some will see an opportunity of making more money on the back of the Australian misfortunes,” Shabangu said. “That opportunity may very well be a serious threat to our supplies for electricity generation. We will be monitoring the situation closely because we will not allow a situation” that will harm the economy.
Shabangu welcomed a Jan. 31 call by BHP Billiton’s South African energy coal unit for bids to buy prospecting rights over its undeveloped reserves, saying it would help bring new investors into the industry.
South Africa is the world’s seventh biggest coal producer and the fifth biggest exporter of the fuel, government data shows. In 2009, the country produced 249 million tons of thermal coal, 74 percent of which was consumed locally, and had about 30 billion tons of reserves.
--Editors: John Deane, Alastair Reed