As you may have seen, coal stocks have been hammered recently (EXL,CEY,MCC...) because of big drops in price of coal.
But just possibly, could good old booring coal be the next boom commodity?
China is looking at 'liquefying' coal, to act as an oil replacement.
http://www.globalcoal.com/news/coalnews.cfm
While U is booming ATM, the problem is that U is only used to create electricity (on any meaningful scale). But electricity is basically not storable in significant quantities, so is not much good for mobile needs (cars, trucks etc). That is why petrol (oil) is vital to the economy.
But if in future years, a liquid energy source can be obtained from coal, coal COULD go through the roof.
I like EXL for a pure coal play (don't own any ATM). SRL probably better as it is a diversified miner and has other interests.
excalibur
19th-November-2005, 06:21 AM
Good Argument Markrmau.
Could be a good reason why oil price is deflating.
I fear that the price of coal will explode.
Coal mine stocks are behaving very peculiar. Won`t be surprised for a breakout.
Cheers from Germany
michael_selway
3rd-January-2006, 01:25 PM
As you may have seen, coal stocks have been hammered recently (EXL,CEY,MCC...) because of big drops in price of coal.
But just possibly, could good old booring coal be the next boom commodity?
China is looking at 'liquefying' coal, to act as an oil replacement.
http://www.globalcoal.com/news/coalnews.cfm
While U is booming ATM, the problem is that U is only used to create electricity (on any meaningful scale). But electricity is basically not storable in significant quantities, so is not much good for mobile needs (cars, trucks etc). That is why petrol (oil) is vital to the economy.
But if in future years, a liquid energy source can be obtained from coal, coal COULD go through the roof.
I like EXL for a pure coal play (don't own any ATM). SRL probably better as it is a diversified miner and has other interests.
Hi yeah i like EXL too, dont have any yet, ir dropped a bit more today due to an annoucement of increase costs
However if u look at the Forecasts (comsec), they seem very good even despite drop in Coal Prices/SP? Forecast EPS for 2008 is 136.5c? thats a PE of under 5 using current SP? Nice dividends too
EPS(c) PE Growth
Year Ending 30-06-06 70.2 9.1 42.3%
Year Ending 30-06-07 117.7 5.4 67.7%
I have quite a few EXL bought May 04 at $2.20, and, despite present lowered SP, am happy to be holding for a recovery: regard it as a long term stock.
Julia
michael_selway
25th-January-2006, 12:08 AM
I have quite a few EXL bought May 04 at $2.20, and, despite present lowered SP, am happy to be holding for a recovery: regard it as a long term stock.
Julia
HI Julia, there are 2 stocks that u bought low on, GTP and EXL
At current prices, which woudl you favour more and why? Both stocks have dropped a bit this yr
thx
MS
nizar
25th-January-2006, 10:45 AM
exl quarterly out 2day...
looks good 2 me, market doesnt seem 2 think so...
maybe a buying opportunity?
Julia
25th-January-2006, 11:18 AM
To contradict my earlier post, I sold all my EXL a couple of weeks ago. The stock had done pretty well for me (bought at $2.20), it was down more than $2 off its high and the chart showed a continuous descent. Happy to take my profits and go. Since then the price has been erratic. I'm happy to be out for now - there's just too much uncertainty about coal prices for me at present.
Michael: really wouldn't like to compare GTP and EXL. I've sold some of my GTP and, although I believe the fundamentals for GTP in the longer term are excellent, I'll sell more at the annual peak of May/June if not before, not because of any unhappiness with the company but just because I'm overweight in this stock.
Julia
michael_selway
25th-January-2006, 11:27 AM
To contradict my earlier post, I sold all my EXL a couple of weeks ago. The stock had done pretty well for me (bought at $2.20), it was down more than $2 off its high and the chart showed a continuous descent. Happy to take my profits and go. Since then the price has been erratic. I'm happy to be out for now - there's just too much uncertainty about coal prices for me at present.
Michael: really wouldn't like to compare GTP and EXL. I've sold some of my GTP and, although I believe the fundamentals for GTP in the longer term are excellent, I'll sell more at the annual peak of May/June if not before, not because of any unhappiness with the company but just because I'm overweight in this stock.
Julia
Hi Julia
ok thx, when u say "overweight" does that mean u have to much in your portfolio?
Also GTP u say there is an annual peak May/June GTP? Do you know why?
EXL MCC CEY GCL, yeah very unstable atm, hard to say which way it will go
Thanks
MS
Julia
25th-January-2006, 02:16 PM
Hi Michael,
Yes - overweight means exactly that. It happened for a number of reasons which are not relevant here. I don't mind being similarly overweight in, e.g., some of the banking stocks, but am not comfortable when it's something as volatile as GTP
Re the annual peak. This occurs when there is heavy buying of the various "Trees" managed invesment schemes (buying of the tree lots themselves) because of the tax advantages for the end of the financial year. The perception of the extra renenue/profit to the company seems to carry through to the SP.
Regards
Julia
nizar
25th-January-2006, 03:58 PM
Hi Michael,
Yes - overweight means exactly that. It happened for a number of reasons which are not relevant here. I don't mind being similarly overweight in, e.g., some of the banking stocks, but am not comfortable when it's something as volatile as GTP
Re the annual peak. This occurs when there is heavy buying of the various "Trees" managed invesment schemes (buying of the tree lots themselves) because of the tax advantages for the end of the financial year. The perception of the extra renenue/profit to the company seems to carry through to the SP.
Regards
Julia
hey julia
u mean all companies generally experience sp peaks at end of financial yr? do u mean our financial year (30 June) or like the specific companies' end of financial yr eg. MBL end of financial yr is 31st March and they report mid-May.
Julia
25th-January-2006, 06:17 PM
Nizar:
No, I do not mean that all companies experience peaks at the end of the financial year (30 June).
If you look back through the thread on GTP (rather than get off track on the "Coal" thread, you will probably find several posts on the special situation regarding not only GTP but other companies who have MIS (managed investments schemes) which are mostly bought for their tax advantages.
Julia
Julia
25th-January-2006, 06:18 PM
Nizar:
No, I do not mean that all companies experience peaks at the end of the financial year (30 June).
If you look back through the thread on GTP (rather than get off track on the "Coal" thread), you will probably find several posts on the special situation regarding not only GTP but other companies who have MIS (managed investments schemes) which are mostly bought for their tax advantages.
Julia
Smurf1976
25th-January-2006, 08:16 PM
Some non-financial background info on coal for those who are interested... Ignore this if you're only interested in price charts etc.
As a rough guide, there's the same energy (heat) content in a metric tonne of export grade (thermal) black coal as there is in 4.4 barrels of crude oil. That will vary a bit depending on the grade of coal and source of oil.
Coal ranges from lignite (brown coal) to sub-bituminous to black to anthracite. There are various sub categories within those groups. Actual mining in Australia for black coal (the common exportable grade) takes place mostly in Qld and NSW and on a much smaller scale in WA where it's used locally in industry and power stations. Australia's coal exports originate from Qld and NSW. Vic (lignite), SA (a rather unique type of sub-bituminous coal) and Tas (sub-bituminous) do not produce coal suitable for export. Production in those states is used locally for power generation (Vic, SA) and heavy industry, particularly paper mills and cement works (Tas). Coal is not mined in the NT.
The main way that coal competes with other fuels is for the generation of electricity. In Australia, about 80% of all electricity is produced from coal. About 10% comes from hydro (60% of that in Tas) and the rest is mostly from natural gas (WA and SA dominate gas consumption for electricity generation but it's used in all states and supplies 95% of total generation in NT). Small amounts of oil are used for startup of coal-fired plant, in isolated communities and for peak power generation to the main grid.
Internationally, coal is far less dominant but is still by far the most important resource used for electricity generation. The major international sources are coal, nuclear, hydro, gas and oil in that order. There is significant room for coal to grow at the expense of nuclear and/or gas.
In the USA it's coal, nuclear, gas, hydro, oil in that order. In the UK it's gas, coal, nuclear and small amounts of various others (oil, renewables) in that order. In New Zealand it's hydro, gas/coal (there's significant switching between the two according to availability), geothermal and oil in that order.
Oil tends to be used mostly for peaking plants or as backup and in general it would not be economic to construct new coal-fired plant for this purpose unless the oil price really does head to the moon. New Zealand just built a new oil-fired plant solely for backup use. Coal and particularly gas-fired plants often use oil as a backup when the primary fuel source is in short supply. Various gas-fired plants in Australia do this from time to time.
Existing hydro plants have virtually zero cost and thus aren't likely to be prematurely replaced and they have long lives. Typically they're designed for a minimum life of 70-90 years although for most plants they ought to survive far longer than that with proper maintenance. There's quite a few 100+ year old hydro plants still fully operational with the original machinery.
Non-hydro renewable energy sources aren't a serious contender as a replacement for conventional power sources at the present time. They are, however, a clean and useful supplement in many cases.
So in practice it's coal versus nuclear versus gas. As gas becomes expensive (far too expensive for economic power generation in US and UK now) it comes back to nuclear versus coal and that is more a question of politics than anything else.
If coal liquefaction ever gets off the ground in a big way then that would certainly increase coal demand. However, much of the interest so far is in using low grade brown coal rather than black coal. Various plants have been proposed in Victoria and New Zealand amongst other places. In my opinion there won't be serious demand for black coal as a feedstock for "oil" production in the next 10 years as there simply isn't anywhere near sufficient investment being made to build the necessary liquefaction plants on sufficient scale. That doesn't mean there will be no demand for coal for that purpose though.
Coal is also relatively abundant comapred to oil and it's still very easy to increase coal production. No different to any other mineral apart from oil/gas in that sense. It lacks genuine scarcity. Of course that doesn't preclude a bull market, but it lacks the sort of scarcity which leads to wars etc.
This post for info only. I have intentionally not drawn any conclusions regarding price. Think about it and reach your own conclusions. :)
Julia
25th-January-2006, 10:37 PM
Hi Smurf
Thanks for a really informative and interesting post. Would you say what happens from here in terms of choices of energy supply etc. is more politically determined than anything else?
Julia
michael_selway
26th-January-2006, 12:08 AM
Some non-financial background info on coal for those who are interested... Ignore this if you're only interested in price charts etc.
As a rough guide, there's the same energy (heat) content in a metric tonne of export grade (thermal) black coal as there is in 4.4 barrels of crude oil. That will vary a bit depending on the grade of coal and source of oil.
Coal ranges from lignite (brown coal) to sub-bituminous to black to anthracite. There are various sub categories within those groups. Actual mining in Australia for black coal (the common exportable grade) takes place mostly in Qld and NSW and on a much smaller scale in WA where it's used locally in industry and power stations. Australia's coal exports originate from Qld and NSW. Vic (lignite), SA (a rather unique type of sub-bituminous coal) and Tas (sub-bituminous) do not produce coal suitable for export. Production in those states is used locally for power generation (Vic, SA) and heavy industry, particularly paper mills and cement works (Tas). Coal is not mined in the NT.
The main way that coal competes with other fuels is for the generation of electricity. In Australia, about 80% of all electricity is produced from coal. About 10% comes from hydro (60% of that in Tas) and the rest is mostly from natural gas (WA and SA dominate gas consumption for electricity generation but it's used in all states and supplies 95% of total generation in NT). Small amounts of oil are used for startup of coal-fired plant, in isolated communities and for peak power generation to the main grid.
Internationally, coal is far less dominant but is still by far the most important resource used for electricity generation. The major international sources are coal, nuclear, hydro, gas and oil in that order. There is significant room for coal to grow at the expense of nuclear and/or gas.
In the USA it's coal, nuclear, gas, hydro, oil in that order. In the UK it's gas, coal, nuclear and small amounts of various others (oil, renewables) in that order. In New Zealand it's hydro, gas/coal (there's significant switching between the two according to availability), geothermal and oil in that order.
Oil tends to be used mostly for peaking plants or as backup and in general it would not be economic to construct new coal-fired plant for this purpose unless the oil price really does head to the moon. New Zealand just built a new oil-fired plant solely for backup use. Coal and particularly gas-fired plants often use oil as a backup when the primary fuel source is in short supply. Various gas-fired plants in Australia do this from time to time.
Existing hydro plants have virtually zero cost and thus aren't likely to be prematurely replaced and they have long lives. Typically they're designed for a minimum life of 70-90 years although for most plants they ought to survive far longer than that with proper maintenance. There's quite a few 100+ year old hydro plants still fully operational with the original machinery.
Non-hydro renewable energy sources aren't a serious contender as a replacement for conventional power sources at the present time. They are, however, a clean and useful supplement in many cases.
So in practice it's coal versus nuclear versus gas. As gas becomes expensive (far too expensive for economic power generation in US and UK now) it comes back to nuclear versus coal and that is more a question of politics than anything else.
If coal liquefaction ever gets off the ground in a big way then that would certainly increase coal demand. However, much of the interest so far is in using low grade brown coal rather than black coal. Various plants have been proposed in Victoria and New Zealand amongst other places. In my opinion there won't be serious demand for black coal as a feedstock for "oil" production in the next 10 years as there simply isn't anywhere near sufficient investment being made to build the necessary liquefaction plants on sufficient scale. That doesn't mean there will be no demand for coal for that purpose though.
Coal is also relatively abundant comapred to oil and it's still very easy to increase coal production. No different to any other mineral apart from oil/gas in that sense. It lacks genuine scarcity. Of course that doesn't preclude a bull market, but it lacks the sort of scarcity which leads to wars etc.
This post for info only. I have intentionally not drawn any conclusions regarding price. Think about it and reach your own conclusions. :)
Hi Smurf thx!
Btw do u knwo why there was a surge in Coal Prices prior in 2004, thus the rise of EXL, MCC, CEY, GCL (before they dropped in 2005)?
MS
excalibur
27th-February-2006, 10:39 PM
2005 was of course a boom year for coal because of the high request of coal for growing china and the japanese steel mills. There are a few factors to keep in mind when dealing coal. First of all coal is handled with US dollars. And so long the dollar is weak, there is a stagnation in the rise of value of stock. If you anlayze all 4 securities (EXL, MCC, CEY, GCL), they all have been having trouble in the past year. I would define such a behaviour as a correction in price ( as the old Kostolany used to put it).
Of course china has been active in obtaining commodities of its own but IOP it will never be able to obtain sufficient coal for there factories, which are situated in the east. There coal mines are unfortunately situated in the west and transportation to the mills is utterly expensive. Its cheaper for them to ship it out of australia.
I am expecting a stronger US dollar this year which will force the price of oil to stagnate. IOP it is already happening. Paying oil in US dollars means inflation with an expensive greenback. Consequentially commodities like coal will sky-rocket for a while...and then we`ll see...
michael_selway
27th-February-2006, 10:57 PM
2005 was of course a boom year for coal because of the high request of coal for growing china and the japanese steel mills. There are a few factors to keep in mind when dealing coal. First of all coal is handled with US dollars. And so long the dollar is weak, there is a stagnation in the rise of value of stock. If you anlayze all 4 securities (EXL, MCC, CEY, GCL), they all have been having trouble in the past year. I would define such a behaviour as a correction in price ( as the old Kostolany used to put it).
Of course china has been active in obtaining commodities of its own but IOP it will never be able to obtain sufficient coal for there factories, which are situated in the east. There coal mines are unfortunately situated in the west and transportation to the mills is utterly expensive. Its cheaper for them to ship it out of australia.
I am expecting a stronger US dollar this year which will force the price of oil to stagnate. IOP it is already happening. Paying oil in US dollars means inflation with an expensive greenback. Consequentially commodities like coal will sky-rocket for a while...and then we`ll see...
Hey i agree with u, btw what does IOP mean?
Yeah bascially if costs are high as experienced by some of our coalers, then they would naturally demand higher prices. Coal although "dirty" is relatively cheap and still very efficient when compared to crude
Which Coal Stocks do u think will perform better at current prices out of EXL, MCC, CEY, GCL, FLX, RSP, other?
Coal although "dirty" is relatively cheap and still very efficient when compared to crude
This is a non-financial post relating to the above for those who may be interested.
In terms of the end uses, primarily electricity generation, steel production and to a lesser extent cement kilns and factory boilers (eg paper mills), coal isn't particularly "dirty" compared to crude oil in the traditional sense. And traditional steel production is based on coke (from coal) anyway so oil isn't a direct substitute there.
Coal emits approximately 20% more carbon dioxide (greenhouse gas) when used at the same efficiency level in electricity generation (steam turbine plant). But carbon dioxide is a non-conventional pollutant in that it has no local effects in practice.
Conventional pollutants (air pollution) are particulates (visible smoke), oxides of nitrogen, hydrocarbons (unburnt fuel) carbon monoxide (a colourless, odourless toxic gas commonly associated with car exhaust) and sulphur dioxide (acidic gas which causes acid rain). In the context of large scale industrial use with typical (relatively cheap) pollution controls it's only the sulphur dioxide that is relevant unless the local climate results in an accumulation of oxides of nitrogen (leading to smog formation) or there is some ultra-sensitivity on the issue (not likely in China).
Australian coal is generally low in sulphur - hence why there has never been an effort to limit emissions from Australian coal-fired power stations since it's just not a problem in practice. UK (and elsewhere) coal is significantly higher in sulphur content which is the reason for it having caused problems overseas.
Crude oil also contains very significant amounts of sulphur. Very little of this makes its way through to petrol or diesel (it's removed at the refinery in a rather expensive process - that's why truck emissions are much cleaner now than even 5 years ago). The limits in Australia and other countries for sulphur content in petrol and diesel have been progressively reduced and are at the point now where there's little difference in the overall impact of heavy vehicles (eg buses) running on diesel versus natural gas. Different pollutants but overall not a great difference.
Heavy fuel oil is, however, another matter. It contains typically 1 to 4% sulphur and, outside of Japan, oil-fired power stations generally don't have any controls on sulphur dioxide (SO2) emissions (significant amounts of unrefined crude oil are burned in Japanese power stations in addition to fuel oil). It goes straight up the stack. For example, the then oil-fired (now gas fired) Bell Bay power station in Tasmania emitted more sulphur dioxide than the much larger coal-fired stations in the mainland states. Not more per unit of production, but more in total despite being less than one sixth the size of Hazelwood PS (Vic). No longer an issue but there was sufficient concern for Hydro to do fallout monitoring when the plant was running (infrequently - it's backup to hydro in the event of severe drought or breakdown) and the sulphur issue was a key one in favour of conversion to another fuel when permanent operation was first contemplated (cost being another issue).
EU regulations limit sulphur in fuel oil consumed in power stations to 1%. Some other countries also have similar regulations but only in Japan do oil-fired power stations have effective emissions controls (due to their location in the metro area of major cities). Even with the EU limit, Australian coal is no worse and generally cleaner (even without emission controls). That said, the 4% sulphur fuel is still going somewhere but it sells at a discount to the lower sulphur grades. Australian limits vary somewhat - 0.05% (ridiculously expensive but it's only backup to natural gas to run the plant) from memory at Newport PS (Melbourne metro area) and it was limited to 3% at Bell Bay (typically 2.5% was used in practice). There's crude oil being produced which contains 6% and even 8% sulphur.
At considerable expense (and consumption of limited limestone resources) sulphur emissions can be reduced to very low levels from either coal or oil-fired plant. It's a question of cost (it's no secret that at least one very large UK coal-fired plant switches the SO2 scrubbers off at night...).
Coal-fired power stations also emit significant quantities of other pollutants not mentioned above, likewise oil. Nickel and vanadium are among the more significant ones in the case of oil (vanadium being linked with asthma with health effects having been observed in some countries (notably UK)) and coal emits mercury (in fact it's the largest source worldwide).
Modern ultra-supercritical coal fired plant operates at higher efficiency and produces less of all major pollutants due to less coal being used. Such plants exist in Queensland (only the newest plants) in Australia. Other options are fluidised bed combustion (virtually zero visible emissions even without gas scrubbers) and the big goal is to make integrated combined-cycle gassification (IGCC) viable - literally using the coal as gas with the resultant clean emissions.
In short, Australian coal is clean enough to meet emissions requirements, especially if SO2 scrubbers are used. It's cleaner than oil (likewise coal from some other countries) and vastly cheaper. The exception is greenhouse gas emissions but (waiting to be flamed here :D ) I can assure you that the world as a whole is NOT doing anything meaningful to reduce emissions, in fact they will increase. The Kyoto Protocol is a cause of net increases in emissions due to the accelerated economic growth it encourages in non-target (no emissions limits) countries particularly China - a fact that's reasonably well understood. That is, shift manufacturing away from Kyoto countries thus boosting the economy and consumer demand in non-Kyoto countries.
The coal industry responded to the news that Kyoto was to be ratified by announcing mine and port expansions whilst the nuclear industry was likewise rather happy. More nuclear power in the developed countries, more coal demand in the developing countries and in total. It's more of an economic plan to boost the global (but not developed countries) economy than an environmental agreement. Politics... Worth noting that many countries that are required to meet targets under Kyoto are already well above target emissions and seem unlikely to meet their target levels. They forgot about natural gas depletion with the UK government in particular now acknowledging that coal is part of the future whereas just 2 years ago they absolutely opposed it.
Market Cap
28th-February-2006, 01:16 AM
Hey i agree with u, btw what does IOP mean?
Which Coal Stocks do u think will perform better at current prices out of EXL, MCC, CEY, GCL, FLX, RSP, other?
Here's a link to Analyst's recommendation on Coal companies in Australia and elsewhere...
Best value Aussie companies appears to be GCL and MCC.
excalibur
28th-February-2006, 07:03 AM
Hey i agree with u, btw what does IOP mean?
Yeah bascially if costs are high as experienced by some of our coalers, then they would naturally demand higher prices. Coal although "dirty" is relatively cheap and still very efficient when compared to crude
Which Coal Stocks do u think will perform better at current prices out of EXL, MCC, CEY, GCL, FLX, RSP, other?
Sorry Mike,
With IOP I meant IMO ( In my opinion) ...was kind of a lapsus.
I am not used to this computer language yet.
Well back to the coal stocks:
I do not want to give any advice, but if you`re dealing with australian securities, then I would keep an eye on GCL. They are in a phase of buying back about 4000000 shares, which isn`t very good news gazing at the speculative side, but they do have stable contracts with Japan and are having an increase in Cash-Flow. The security is interesting because of the 11 ct. dividend that has been payed recently.
noirua
15th-March-2006, 12:44 AM
The position of coal prices has become quite interesting and this concerns the bottom end of the coal market. Thermal and sub-bitumous ( steaming ) coals are mainly used in powerstations and there are vast reserves in South Australia. China has recently announced the intent to build an increasing number of powerstations using sub-bitumous coal.
It does seem that the future is very bright for coal in the 30 years ahead.
nizar
15th-March-2006, 09:46 AM
The position of coal prices has become quite interesting and this concerns the bottom end of the coal market. Thermal and sub-bitumous ( steaming ) coals are mainly used in powerstations and there are vast reserves in South Australia. China has recently announced the intent to build an increasing number of powerstations using sub-bitumous coal.
It does seem that the future is very bright for coal in the 30 years ahead.
yes i agree
i read a report in AFR a few months ago about australia's energy sources...
in 2050, we are still expected to generate 40% of our energy from coal (down from about 50% today)..
EXL the best exposure?
michael_selway
15th-March-2006, 01:07 PM
yes i agree
i read a report in AFR a few months ago about australia's energy sources...
in 2050, we are still expected to generate 40% of our energy from coal (down from about 50% today)..
EXL the best exposure?
Hm coal specialists
EXL, MCC, CEY, GCL, FLX, RSP?
any others not too small?
Yeah i like exl the best beacause of their forecast EPS through to 2010 (see half yearly)
However their Millenium Mine cost blowout has been a problem this yr, hopefully it will be completely fixed up in May 06 as they have said
thx
MS
Smurf1976
15th-March-2006, 06:53 PM
yes i agree
i read a report in AFR a few months ago about australia's energy sources...
in 2050, we are still expected to generate 40% of our energy from coal (down from about 50% today)..
EXL the best exposure?
Note that this refers to primary energy and not electricity generated (electricity being the major use of coal). A bit over 80% of Australia's electricity is from coal, about 10% from hydro (60% of that in Tasmania, 30% from the Snowy and the rest in Vic, Qld, NSW and WA) and most of the rest is from natural gas. A minor amount is from oil both to supply the major grids and in remote areas (diesel) and also wind and bagasse (sugar industry waste) are minor sources. Trivial sources include solar and landfill gas.
In terms of primary energy regardless of the end use, coal and oil dominate with most of the rest from gas. Hydro is minor in this context partly because of conversion efficiency and what's being measured. In the case of hydro (and wind, solar etc) it's the output of the power stations (themselves over 90% efficient in the case of hydro) which is measured whereas with coal it's the input (60%+ of which is lost in conversion to electricity) which is measured. So the minor sources (hydro etc) are more important than primary energy stats indicate but they are still relatively minor compared to coal, oil and gas. Wood makes up most of the rest with a bit from wind and trivial amounts from solar etc. :2twocents
michael_selway
16th-March-2006, 07:19 PM
Note that this refers to primary energy and not electricity generated (electricity being the major use of coal). A bit over 80% of Australia's electricity is from coal, about 10% from hydro (60% of that in Tasmania, 30% from the Snowy and the rest in Vic, Qld, NSW and WA) and most of the rest is from natural gas. A minor amount is from oil both to supply the major grids and in remote areas (diesel) and also wind and bagasse (sugar industry waste) are minor sources. Trivial sources include solar and landfill gas.
In terms of primary energy regardless of the end use, coal and oil dominate with most of the rest from gas. Hydro is minor in this context partly because of conversion efficiency and what's being measured. In the case of hydro (and wind, solar etc) it's the output of the power stations (themselves over 90% efficient in the case of hydro) which is measured whereas with coal it's the input (60%+ of which is lost in conversion to electricity) which is measured. So the minor sources (hydro etc) are more important than primary energy stats indicate but they are still relatively minor compared to coal, oil and gas. Wood makes up most of the rest with a bit from wind and trivial amounts from solar etc. :2twocents
Hi Smurf, whats yoru preference for the below coal specialists?
EXL, MCC, CEY, GCL, FLX, RSP?
thanks
MS
michael_selway
20th-March-2006, 09:15 AM
Smurf,
You seem to know your stuff!
Any thought's on GDY?
Is geothermal energy viable in your opinion?
Michael,
Sorry to go off topic slightly.
Cheers
Hi its cool
Btw anyone notice a new ARA index for coal?
http://www.globalcoal.com
noirua
12th-May-2006, 11:22 PM
Coal is still a major part of power for the distant future as new technological power stations come to the fore. Clean coal is the way forward for power over the next thousand years. South Australia has enough sub-bitumous coals to power Australia for the next 10 thousand years.
http://www.draxpower.com/about.php
http://www.draxpower.com/about.php?page=fun
http://www.draxpower.com/about.php?page=intro
http://www.draxpower.com/environment.php
http://www.draxpower.com/community.php
RichKid
8th-June-2006, 05:36 PM
This is a feature article about producing 'clean' coal through separating CO2 and then disposing of it safely, I think the issue has been mentioned before by Smurf and others. Can this really be so good? Will it work? 300 yrs of coal is a helluva lot!! I can see why it's in the national interest to harness it if you can take the negatives out of it.
http://www.theaustralian.news.com.au/story/0,20876,19398445-28737,00.html
An extract:
...........Together with proposed private industry spending, investment in clean coal technology in Australia alone is expected to tip $20 billion in the next decade.
The reason for this massive investment is that Australia has about 300 years' worth of coal still in the ground and fossil fuels comprise a quarter of all exports. Australia also has 24 large power stations that burn more than 250,000 tonnes of coal every day to supply what is among the cheapest electricity in the Western world. The downside is every station releases thousands of tonnes of carbon dioxide into the atmosphere.
The federal Government has gone a long way to support the coal industry, risking international opprobrium by refusing to sign the Kyoto protocol - a treaty that seeks to reduce greenhouse gas emissions by putting a price on carbon dioxide. ................
Smurf1976
8th-June-2006, 06:27 PM
A few points on that article...
1. The power station where the carbon capture project is planned is the Callide A station in Queensland. This is a relatively small (120 MW) plant which consists of 4x30MW units all black coal-fired. The plan is to fit the technology to one of those units as a trial. The other Callide power stations are not involved at this stage.
As a relatively high cost plant in a well supplied market (Queensland being the only state in that position) Callide A is idle at present. Production from the plant with carbon capture is primarily to test and demonstrate the technology although running one 30 MW unit constantly would, after allowing for maintenance, generate about 0.5% of Queensland's electricity or 0.1% of national electricity. As I said, the point is to demonstrate the technology rather than achieve large scale emissions reductions at this stage.
If successful, there is no reason (apart from cost) why the technology could not be fitted to other Australian power stations within reasonably close distance of somewhere suitable to store the carbon. The brown coal power stations in the Latrobe Valley (Vic) are the most obvious place to start given their close proximity to depleted offshore oil and gas fields and baseload (constant 24/7) operation although there are plenty of opportunities elsewhere too.
From a practical perspective, it wouldn't be possible to take more than one large generating unit in each state offline at a time and the conversion would likely take a year or two for each unit. (The time is speculation at this stage however since it's untested in practice.) So over a number of years it would be possible to gradually convert existing power stations to a zero-emissions operation doing it one unit at a time.
Given the need to reduce oil and gas use for power generation as other demands for those fuels increase and supplies tighten, it's just dreaming to think that coal is about to disappear as a power source in Australia or internationally. Coal generates about 40% of world electricity now whilst there is a need to replace much of the combined 42% from oil, gas and ageing nuclear plants. Only the 18% that is renewable (mostly hydro) is sustainable without rebuilding and non-carbon emitting in ongoing operation. So, in total, 82% of the world's electricity is from sources that are running out (oil and gas), emit lots of carbon (coal) or are in most cases ageing (nuclear). A huge demand for new capacity in the next 50 years that renewables alone simply will not, can not, meet. So coal and/or nuclear MUST have a future at least for the next half century - a point that even many conservationists acknowledge despite their concerns over the impacts.
2. Regarding the photo of Hazelwood power station in the article, it is somewhat misleading IMO. The visible emissions from the stacks are NOT greenhouse gasses (carbon dioxide is invisible to the human eye). It is mostly condensed water vapour (literally steam) due to the roughly two thirds water content in the coal from the Morwell mine burnt at the plant. The remaining visible emissions are fine ash particles which are now almost completely removed (so it looks like an old photo circa 1970's).
I have my own photos of the plant with 4 units running and 4 offline. I'll scan and post it if I can get access to a scanner and I challenge anyone to tell me which units are idle and which are active in the photo. Clear blue sky is all you'll see. Point here being don't believe the media when they show pictures of polluting industry - carbon dioxide is invisible. If the media is showing pictures of it then you're looking at steam or particles, not carbon dioxide. :2twocents
noirua
27th-June-2006, 12:10 PM
This is a feature article about producing 'clean' coal through separating CO2 and then disposing of it safely, I think the issue has been mentioned before by Smurf and others. Can this really be so good? Will it work? 300 yrs of coal is a helluva lot!! I can see why it's in the national interest to harness it if you can take the negatives out of it.
http://www.theaustralian.news.com.au/story/0,20876,19398445-28737,00.html
An extract:
...........Together with proposed private industry spending, investment in clean coal technology in Australia alone is expected to tip $20 billion in the next decade.
The reason for this massive investment is that Australia has about 300 years' worth of coal still in the ground and fossil fuels comprise a quarter of all exports. Australia also has 24 large power stations that burn more than 250,000 tonnes of coal every day to supply what is among the cheapest electricity in the Western world. The downside is every station releases thousands of tonnes of carbon dioxide into the atmosphere.
The federal Government has gone a long way to support the coal industry, risking international opprobrium by refusing to sign the Kyoto protocol - a treaty that seeks to reduce greenhouse gas emissions by putting a price on carbon dioxide. ................
The efforts by Gail ( India ) Ltd to build an underground coal or lignite Gasification Plants looks to be another way forward. http://www.thehindubusinessline.com/2006/02/18/stories/2006021803170200.htm
michael_selway
6th-July-2006, 11:39 AM
The efforts by Gail ( India ) Ltd to build an underground coal or lignite Gasification Plants looks to be another way forward. http://www.thehindubusinessline.com/2006/02/18/stories/2006021803170200.htm
All of them up today as EXL merger
MCC, CEY, GCL, but not FLX and CNA
thx
MS
noirua
7th-July-2006, 10:58 AM
All of them up today as EXL merger
MCC, CEY, GCL, but not FLX and CNA
thx
MS
It looks like a recovery period for coal stocks as confidence rises. Even ordinary thermal coal should stay above US$50 per tonne and steaming coal, at the bottom end, is getting good reviews on pricing. Even FLX and CNA should recover quickly to well above recent lows.
noirua
10th-February-2007, 11:04 AM
Thermal Coal prices are set to increase in the next round of price agreements. Check the coal stocks and work out their production, production costs and likely increase in profits, as many are now forgotten.
China still rules on demand: http://au.biz.yahoo.com/070119/19/125j6.html
Thermal Coal prices are set to increase in the next round of price agreements. Check the coal stocks and work out their production, production costs and likely increase in profits, as many are now forgotten.
China still rules on demand: http://au.biz.yahoo.com/070119/19/125j6.html
Hi, at current prices, which coal stocks u like best? CEY, GCL, FLX, CNA, RSP, any others?
http://www.globalcoal.com
NEWC Index
Oct-2006 42.59
Nov-2006 42.36
Dec-2006 50.99
Jan-2007 51.
thx
MS
Garpal Gumnut
11th-February-2007, 10:37 AM
Thermal Coal prices are set to increase in the next round of price agreements. Check the coal stocks and work out their production, production costs and likely increase in profits, as many are now forgotten.
China still rules on demand: http://au.biz.yahoo.com/070119/19/125j6.html
Which are the specialty thermal stocks? I just use BHP, RIO as an entry to coal which probably dilutes any movements in prices for me as they are into so many other resources.
Garpal
Smurf1976
11th-February-2007, 01:39 PM
In December, Xinhua news agency reported that China's coal use was likely to increase to 2.5 billion tonnes in 2007. Government data gives 2005 coal consumption at 2.2 billion tonnes
Each year the increase in Chinese coal consumption is far greater than the total amount that Australia uses. A point of major significance to both the coal market and the climate change debate. :2twocents
noirua
21st-February-2007, 09:15 AM
Dear Noirua,
Which are the specialty thermal stocks? I just use BHP, RIO as an entry to coal which probably dilutes any movements in prices for me as they are into so many other resources.
Garpal
Hi, making profits on coal production can be very hard work, note the Radio Report yesterday my CEY. There is a need to do a lot of research on what types of coal a company has at each mine and the costs versus position of the mine. Longwall mining can present many problems.
It will be a while yet before the new coal loader is commissioned at Newcastle. Seventy ships are reported to be at anchor waiting. Demurrage costs are racking up.
Many, including Peabody, Xstrata and Felix Resources, are waiting go-aheads on thermal coal mines in NSW. These would be combined with the new port extension at Newcastle that also awaits a go-ahead.
Companies like MCC and CEY, are beset with problems, and may come good if they manage to overcome these. FLX mines mostly thermal coal, but is treble the price it was less than 12 months ago and there is a gamble factor concerning the extension of the Newcastle port and the Moolarben go-ahead. Coal and Allied are the largest Aussie in the thermal coal sector; Like FLX their key assets are in the Hunter Valley via Newcastle.
A long answer in what remains a quite risky sector.
An interesting link: http://www.iht.com/articles/2007/01/11/bloomberg/sxasia.php
michael_selway
21st-February-2007, 06:58 PM
Hi, making profits on coal production can be very hard work, note the Radio Report yesterday my CEY. There is a need to do a lot of research on what types of coal a company has at each mine and the costs versus position of the mine. Longwall mining can present many problems.
It will be a while yet before the new coal loader is commissioned at Newcastle. Seventy ships are reported to be at anchor waiting. Demurrage costs are racking up.
Many, including Peabody, Xstrata and Felix Resources, are waiting go-aheads on thermal coal mines in NSW. These would be combined with the new port extension at Newcastle that also awaits a go-ahead.
Companies like MCC and CEY, are beset with problems, and may come good if they manage to overcome these. FLX mines mostly thermal coal, but is treble the price it was less than 12 months ago and there is a gamble factor concerning the extension of the Newcastle port and the Moolarben go-ahead. Coal and Allied are the largest Aussie in the thermal coal sector; Like FLX their key assets are in the Hunter Valley via Newcastle.
A long answer in what remains a quite risky sector.
An interesting link: http://www.iht.com/articles/2007/01/11/bloomberg/sxasia.php
yeah i liek CEY at current prices, if it does well it can very well
Following on from the "solid Energy Report" from NZ (post 39) . We have an article from 2005 that shows plans for a Coal Fired Non-Polluting Power station: http://www.dw-world.de/dw/article/0,2144,2035398,00.html
noirua
10th-March-2007, 10:37 AM
Coal is one of Australia's major exports and companies are increasingly embracing new tecnology. The Gladstone Centre for Clean Coal is one of these: http://www.gc3.cqu.edu.au/
Clean coal is important as it is a major power source for now and well into the future: http://www.gc3.cqu.edu.au/burn-coal-cleanly/index.php
Smurf1976
10th-March-2007, 12:10 PM
Coal - Environment report " solid energy "
http://img.scoop.co.nz/media/pdfs/0702/Environment_Report._web.pdf
For those not aware, Solid Energy is a government owned coal mining company in NZ.
For quite some time Solid Energy has been interested in developing brown coal-fired power generation in NZ as natural gas reserves in that country are depleted (natural gas provides over a quarter of NZ electricity).
That said, another NZ company, Mighty River Power (predominantly involved with hydro-electricity as the name implies) has dropped plans to convert an "old" (built in the 1970's but has never generated as single kilowatt - not even a trial run) oil-fired plant to coal-firing on the basis that renewable energy, specifically geothermal, is a cheaper option than coal. That plant isn't near coal mines however so it did have transport cost issues (and would likely have used imported coal).
noirua
13th-March-2007, 11:24 AM
The Australian Government, a report goes to Mr Howard in May, should point out how New Technology and Brown Coal is the way forward in Australia: http://www.theaustralian.news.com.au/story/0,20867,21365418-5005200,00.html
noirua
21st-July-2007, 11:57 AM
Coal prices remain on the up in US Dollar terms and that particularly concerns prices of export thermal coals, PCI coal and semi-soft coking. The rise in the Aussie Dollar to around A$1.15 to the US$ is starting to squeeze profit margins on those who have fixed prices and have failed to take currency options. Demurrage costs and the problems at Newcastle Dock in particular remain negative factors.
Those who are able to make up short falls in NSW Docks by supplying at US$58+ a tonne for thermal are doing well.
The futures bright for thermal and indeed the futures coal.
noirua
12th-August-2007, 10:21 AM
A link from a few months back that shows the interest for thermal coal use in Power Stations in China. The contract price is usually more settled.
http://www.kalenergyinc.com/investors/reports/everybody_loves_coal_2007_05_31.pdf
noirua
14th-August-2007, 01:00 AM
This Bloomberg article shows how the mildly bullish tone for thermal coal has turned very bullish. Thermal coal looks to be "King Coal" for at least the next two years. Spot thermal coal is set to rise on the back of heavy rain in Indonesia.
Thermal, PCI and semi-soft coking coal has risen by up to 22%, on spot, out of Newcastle and Gladstone.
Xstrata and Rio have started their current round of talks that are expected to agree supplies from 1st April 2008 at around US$68 per tonne for thermal and up to US$76 for semi-soft.
noirua
21st-September-2007, 11:35 AM
At the moment thermal coal production will grow and supply will still not match demand. Two or three thermal coal powerstations are opened every month in China alone.
michael_selway
21st-September-2007, 11:28 PM
At the moment thermal coal production will grow and supply will still not match demand. Two or three thermal coal powerstations are opened every month in China alone.
Yes you need to load up on coal! CEY, GCL, FLX, MCC, RSP etc
"ENERGY-starved China will boost coal output by 400 million tonnes a year by 2010 by streamlining the industry and opening a string of new "super" pits, state media reported today.
Widespread closures and mergers will leave fewer than 20 firms, including six to eight new “super coal production enterprises' with a yield of 100 million tonnes each, accounting for more than 50 per cent of the country's entire output by 2010, Xinhua news agency said.
China reported a total coal output of more than 2.3 billion tonnes of coal last year.
Small mines that are illegal or inefficient and have given the industry its appalling safety record are already being weeded out, Wang Xianzheng, deputy director of the State Administration of Work Safety, was quoted as saying.
Over the past two years, more than 9000 small mines have been shut and another 1000 will close by the end of 2007, Xinhua said.
As part of the streamlining process the country plans to build 10 large strip-mines with a production capacity of 10 million tonnes each and another 10 pits with a yield of 10 million tonnes each, Mr Wang said.
China's coal mines are among the most dangerous in the world, and many of the accidents occur in small, unlicensed mines where safety regulations are widely ignored.
More than 4700 coal miners died in China last year, according to official figures, but independent labour groups put the real toll at closer to 20,000 annually. They say many accidents never come to light."
I wonder what effect this move by China might have on our own coal exporters over the coming years.. let alone the possible impact on climate change?
AJ
noirua
6th-October-2007, 09:55 AM
The position of coal, in supplying China, India and the rest of Asia is a very talked about subject.
China are opening 2 or 3 power stations every week and by far the majority are powered by thermal coal mixes. Thermal coal is cheap when compared with oil.
There is new technology, mainly from Germany, but this will take time and China are not prepared to wait.
Indonesia produces a lot of thermal coal but is needing an increasing amount for its own new power stations.
Australia has vast amounts of thermal coal and sub-bitumous coal. The latter is coming more to the fore in South Australia with the Adelaide to Darwin Rail Link in place. Ports are being enlarged and new loaders added.
Apart from these coals, it's lignite that holds a further key as new technology becomes available. There is more lignite in the world than all other coals put together.
The future is coal, unfortunately Asia is going to become a very smokey place. The upsides are enormous and the downsides very obvious.
noirua
31st-October-2007, 10:37 AM
The Newcastle Port became the embarrassment of Australia as 70 ships lay at anchor waiting to berth.
There has been some improvement and the present number of ships at anchor is 39, with 4 in port.
Delay is currently 16.5 days.
noirua
6th-November-2007, 11:22 AM
Coal blending process before shipping out of the R.G. Tanna Coal Terminal, Port of Gladstone, Queensland: http://www.jellinbah.com.au/LibraryFiles/RGTCT%20Blending%20Brochure%202003%2004.pdf
nioka
6th-November-2007, 11:57 AM
The "Coldry" process for treating brown coal, patented by ESI, has the potential to be used in the process of extraction of diesel from brown coal at costs which could be profitable at oil prices above $60 barrel.
In an ASX announcement ESI claim that using the Coldry process which extracts 95% of the water from brown coal to produce a dense and energy rich fuel pellet could be extended to coal to oil applications. Research indicates Coldry pellets have a higher yield per tonne than black coal and eliminate the need for costly energy intensive and high-emissions slurry drying associated with black coal.
For further information check out yesterdays ESI announcement.
Smurf1976
6th-November-2007, 12:07 PM
I'm no expert on Chinese coal reserves, but I did see some research which suggested they would hit peak production around 2020.
If it's correct then given the huge number of new power stations they are building, world coal trade is set to surge once China's produciton peaks.
ithatheekret
6th-November-2007, 12:11 PM
I was under the impression that coking coal is the vareity in highest demand , given the abundance of coal available . I can only see it continuing with strong demand , much to the disgust to the well meaning greenies , money may make the world go round , but it's basically powered by coal for our other needs , this is not a fleeting coincidence as most of the globes major exporters and utilities , need this fuel source for the continuity in manufacturing and other fundamental needs to power players who are scraping the barrel to find a way to reduce operation costs .
noirua
8th-November-2007, 11:11 PM
Green footprints are all very fine but how many back these principals to the extent of reducing their brown footprint: Sell the car, walk further, don't buy packaged products, never fly by aircraft except gliders. Infact, buy pedal cycles for the family and they can use it to cycle 10 kilometres to school and back. Use one carrier bag and never use plastic throw-away ones. Cut down on heating and remove the airconditioning and so it goes on and on.
When you go on green rallies, NEVER TRAVEL BY CAR. Show you mean what you say and use a pedal cycle, WHAT, it's 50 kilometres, so what, are you really the genuine article. YOU ARE, great, I respect you.
trueblue
14th-November-2007, 09:47 AM
Yes you need to load up on coal! CEY, GCL, FLX, MCC, RSP etc
WHC released an exceptional presentation regarding their growth prospects this morning!
makes for a very encouraging and reassuring read for WHC holders!
noirua
28th-November-2007, 04:19 AM
Coal prices are set to remain at high levels during 2008 with all the port problems in Australia and benchmark thermal coal out of Newcastle may well reach US$90 per tonne.
Prices for those miners who are yet to agree deals from April 2008 onwards, may well set benchmark thermal prices at around US$90 per tonne.
Prices for coking coal may well be set to lift with increasing demand from India and other coals, semi-soft coking, P.C.I., and even sub-bitumous, are set to rise further.
Nick Radge
28th-November-2007, 07:50 AM
Nice breakout of a descending triangle in CEY yesterday:
This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.
michael_selway
4th-December-2007, 07:53 PM
Nice breakout of a descending triangle in CEY yesterday:
This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.
Hm you were right about CEY
Do you have any TA thoughts on any of the other coal stocks?
The IMF forecasts World economy growth at 4.75% for 2008. This is against an expected figure of 5.2% in 2007 and actual growth of 5.4% in 2006. The sag is due to reduced growth expected in the USA, UK and parts of Europe.
World coal sales are expected to rise by 35 million tonnes in 2008. Coal prices are expected to remain firm during 2008 in Australia due to Port restrictions. 2009 will start firm but prices are not expected to rise above the 2008 average as Port upgrades and a new terminal at Newcastle comes onstream.
2010 may well be a testing period in Australia for thermal coal.
noirua
2nd-January-2008, 12:16 PM
For some with coal and no where to go it really is a case of "where to now?":
"No unallocated QLD or NSW coal port capacity until 2012; all of the planned expansions at Dalrymple, Gladstone, Newcastle, already committed."
Back in 2005, China announced they would need to build 544 new coal fired Power Stations to power cities. From a BBC report in March 2005: http://news.bbc.co.uk/2/hi/programmes/newsnight/4330469.stm
ithatheekret
5th-January-2008, 10:07 AM
Hi you meantion "Excel" isthat listed onthe ASX? I thought it was taken over by Peabody Coal, a US company
Thanks
MS
No ....... thank you Micheal , your diligence is correct , I just have to update my lists , all my fault , too busy in other areas .
noirua
6th-January-2008, 02:53 AM
Headline news from Global Coal: http://www.globalcoal.com/news/coalnews.cfm
michael_selway
8th-January-2008, 02:31 PM
No ....... thank you Micheal , your diligence is correct , I just have to update my lists , all my fault , too busy in other areas .
"New South Wales appoints Greiner to help Coal Exports": http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aeByRK6Kl1hM
noirua
16th-January-2008, 12:04 PM
"China coal shortage to continue": http://compareshares.com.au/show_news.php?id=451704
noirua
26th-January-2008, 08:46 AM
China suspends coal exports for two months. Swap Benchmark coal out of Newcastle rockets: http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSSYD2450820080125
This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.
Smurf1976
26th-January-2008, 10:01 AM
Back in 2005, China announced they would need to build 544 new coal fired Power Stations to power cities. From a BBC report in March 2005: http://news.bbc.co.uk/2/hi/programmes/newsnight/4330469.stm
Building power stations is one thing. Having enough coal to fire them is another.
China's situation with coal now is little different to that which normally applies with hydro power. Easy to add more generating capacity (turbines, alternators) but total output is limited by the availability of primary energy (fuel) to run them. Building another power station in this situation doesn't help if you don't also increase the supply of primary energy with which to run it.
It's a new situation for China and indeed most countries but one that's very familiar to New Zealand, parts of South America, Canada, Tasmania and other places that have a long established constraint with primary energy rather than peak generating capacity.
Bottom line: China will be flat out doing whatever they can to get more coal and indeed any primary energy (gas, hydro, nuclear, wind) that's cheaper than the fuel of last resort (ie oil). Imports, domestic production, whatever as long as it's cheaper than oil (which coal is).
The US is also facing a reduction in nuclear output due to drought. Again it's not simply a question of peak capacity but one of primary energy. The lost nuclear output, if it happens, has to be replaced by something else. Realistically that's going to be coal and oil - gas is already tapped out and overloading hydro plants in a drought dosen't work for long.
So, China wants more coal and the US will probably have a bit less to export.
noirua
26th-January-2008, 10:11 AM
There we goes Smurf1976, all plans of mice and men. Anyway, China as a form of Dictatorship, just says "we are not exporting any coal for 2 months" and that is that, no more to be said.
As you infer, China has had to shutdown some powerstations due to lack of coal.
A great pity Australia didn't update the rail system back in 2003 and ports when PM John Howard had such a great chance. Instead they built the Alice Springs to Darwin rail extension (great enterprise), not a lot of use in Queensland and NSW however.
noirua
26th-January-2008, 10:58 AM
Peabody, ARCH, U.S. Coal Miners Rise on Higher Prices: http://www.bloomberg.com/apps/news?pid=20601087&sid=atY6mQ6kyEhA&refer=home
ithatheekret
28th-January-2008, 02:36 PM
5.48 days supply in China , power crisis , govt. bans on further exporting during crisis .
Anyone else think this is a positive for coal stocks ?
Nick Radge
28th-January-2008, 02:46 PM
ithatheekret,
I only have one position on at present, CEY, so here's hoping!
ithatheekret
28th-January-2008, 03:51 PM
Hi Nick ,
Your pulling my leg aren't ya Nick ? :p:
My bet is your laughing all the way to the bank , $1.88 cap ret. and the price is back there already , yeeehaaa .
Yeah yep and yup and I have MCC too ...............
Who said there's no such thing as money trees ? We just have to keep Marius Kloppers at bay :D
Smurf1976
28th-January-2008, 07:06 PM
Does anyone have info on what's happening with the domestic, as opposed to export, price of coal in NSW at the moment? I'm assuming there would be a significant gap between export and domestic prices given the port constraints.
michael_selway
28th-January-2008, 11:06 PM
Hi Nick ,
Your pulling my leg aren't ya Nick ? :p:
My bet is your laughing all the way to the bank , $1.88 cap ret. and the price is back there already , yeeehaaa .
Yeah yep and yup and I have MCC too ...............
Who said there's no such thing as money trees ? We just have to keep Marius Kloppers at bay :D
Micheal you may like value stocks , the US listed DRYS is trading about 9 X and around 4.5 fut earns . Discount to its peers in sector , thought I'd get it out before CNBC ruin a good thing ...........
DRY BULK
PS ... Peers are trading between 10 to 22 X
noirua
29th-January-2008, 12:44 PM
"Disruptions force up coal and iron ore prices": http://www.theaustralian.news.com.au/story/0,25197,23123690-5005200,00.html
ithatheekret
29th-January-2008, 04:00 PM
Hoping still Nick , ya razz .
Hope , you don't hope your a pro , hope is an emotion , I get them usually after I've entered a stock before a US opening , but they're call sphincter reactions until I've hit sell or the stocks has reached my limit .
MCC today for Micheal a bluey and change for a good day mate , I'm smiling .
Looking for a strong close .
PS , Im in line for some ABB too , dif area I know .
Nick Radge
29th-January-2008, 06:30 PM
I had my profit target set at $3.58 and missed by 5c (100% measured move out of the flag). We had a saying on the trading floor, 'don't be a dick for a tick' which basically means be happy with what you got!
Emotion...errr...I did back off 1/2 the position to take profits at $3.90 on the open. You got me all excited...and now I've been let down. There is always tomorrow I guess.
ithatheekret
29th-January-2008, 06:51 PM
Do you trade FX Nick ? I reckon you'd be a whizz at it , if you've been on the trading floor you should be able to smell emotion and sentiment changes in a markets mood .
agro
29th-January-2008, 06:51 PM
any thoughts on AOE - arrow energy?
Nick Radge
30th-January-2008, 11:33 AM
'Plan the trade, trade the plan' Out at my target. I'm now 100% square.
'Plan the trade, trade the plan' Out at my target.
and now probably draining the Eumundi Brewery :D
Good on ya Razz , I mean Nick ,
I did move some off the board , but it was to line up on ABB ( which get's hit hard some days ) , I might game the rest to see if it can waltz into the $5 range , that would be very nice indeed . The swings in the market are huge on some stocks , although the volumes are feeling slower , haven't taken any official count yet .
You'd have a better idea on that than me .
Been in and out for a lark on IPL twice and it's had b. all volume , still have holding though . I even grabbed more ORI , whilst they are not huge buyings , they have been helped by the goldies rise , which I sold , and will probably kick myself for , I'm now in an a position where I feel I have too much cash on the side and it's useless sitting still to me at present , it certainly doesn't have the patience to wait a year . So I have placed a ridiculous entry point for a small parcel of ASX , which in this climate I might actually get . I will be putting a bid in for some more CEY too , by the looks the goldies position left , they're definitely back on the agenda on the next dip , if we get another one ..........
Noted your comment in another thread , showed the missus and it got the same reaction I had :D might have to borrow that one .
Don't hang anything out in the sun though , it will fade , read the label first , especially if it's made in China .
agro
1st-February-2008, 01:02 PM
looks as though the most performing sector on a bull run includes the resource stocks but more specifically iron ore and coal (used in steel)
both these two commodities are being mentioned continually in the AFR and are expected to rise 10 fold..
does that make coal stocks atm under valued?
not to mention the floods in QLD atm! extreme shortage
michael_selway
2nd-February-2008, 12:40 AM
looks as though the most performing sector on a bull run includes the resource stocks but more specifically iron ore and coal (used in steel)
both these two commodities are being mentioned continually in the AFR and are expected to rise 10 fold..
does that make coal stocks atm under valued?
not to mention the floods in QLD atm! extreme shortage
that's all the links i can find ... most the info is in the AFR,
bigt
3rd-February-2008, 09:39 AM
Do any coalers have an opinion on CES? They are performing due dilligence currently on a producing coal mine,and have several other promising tenements.
This should provide cash flow for them if the acquisition proceeds.
They have a tiny mc of $3m, and the chart looks terrible, though looks to have bottomed. Recently announced purchase of 4 iron ore exploration companies in Indonesia, who hold land containing "bedded iron deposits".
$1.7 m cash.
Options expire late 09, exercise 20c, currently 2.5c. SP at 10c, though has been significantly higher during past year (like most other speccies I guess).
Thoughts on whether this could go for a run based on iron acquisition and / or coal mine purchase?
michael_selway
3rd-February-2008, 08:05 PM
Do any coalers have an opinion on CES? They are performing due dilligence currently on a producing coal mine,and have several other promising tenements.
This should provide cash flow for them if the acquisition proceeds.
They have a tiny mc of $3m, and the chart looks terrible, though looks to have bottomed. Recently announced purchase of 4 iron ore exploration companies in Indonesia, who hold land containing "bedded iron deposits".
$1.7 m cash.
Options expire late 09, exercise 20c, currently 2.5c. SP at 10c, though has been significantly higher during past year (like most other speccies I guess).
Thoughts on whether this could go for a run based on iron acquisition and / or coal mine purchase?
Hm interesting, never heard of thsi company before!
Coal Fe Resources Limited was incorporated on 28th September, 2006. The Company was formed with a Vision to be a reliable and dependable Indonesian Mineral Producer by the year 2008. Its Mission is to acquire rights to coal, iron and other mineral projects, explore those projects and, based on successful exploration results and economic conditions, develop those projects to produce and sell those minerals. The Company will also consider new acquisitions.
thx
MS
noirua
12th-February-2008, 12:51 AM
Comments on the recent coal price rise "Macarthur, Centennial and Felix Resources mentioned": http://www.tradingmarkets.com/.site/news/Stock%20News/1085229/?hcode=related&news
Joshua_Steph
12th-February-2008, 01:13 PM
Coal will keep on increasing due to china's export banned..
noirua
18th-February-2008, 10:55 AM
"Newcastle coal rises to Record": http://www.bloomberg.com/apps/news?pid=20601087&sid=ald__YXFuFs0&refer=home
Joshua_Steph
18th-February-2008, 02:30 PM
Coal price is supposed to keep increasing in the coming weeks. But keep vigilant... while the situation back to normal, price may fall..
Safetrading,
www.SafeStocktradingSecrets.com
michael_selway
18th-February-2008, 07:28 PM
Coal price is supposed to keep increasing in the coming weeks. But keep vigilant... while the situation back to normal, price may fall..
Safetrading,
www.SafeStocktradingSecrets.com
Hi Josh are you bearish on coal atm? also if so, is it only short term or maybe long term?
thx
MS
noirua
18th-February-2008, 11:27 PM
"Coal markets rocked by Eskom's ambitous plans": http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A708446
theasxgorilla
19th-February-2008, 04:06 AM
Coal price is supposed to keep increasing in the coming weeks. But keep vigilant... while the situation back to normal, price may fall..
Safetrading,
www.SafeStocktradingSecrets.com
Hi Joshua, could you be so kind as to substantiate this idea with some further information?
ASX.G
noirua
21st-February-2008, 12:53 PM
"China orders State coal mines to increase production": http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aez.KpWt13_k
imaginator
24th-February-2008, 04:16 PM
Guys,
COAL will increase in price about $300 above current levels. My friend working in the commodity sector says lots of reports and forecasts saying that.
WHat are the few coal stocks you can think of? I bought Cockatoo Coals(COK) last week. I think CEY is doing very well too.
michael_selway
24th-February-2008, 08:08 PM
Guys,
COAL will increase in price about $300 above current levels. My friend working in the commodity sector says lots of reports and forecasts saying that.
What are the few coal stocks you can think of? I bought Cockatoo Coals(COK) last week. I think CEY is doing very well too.
Hi have you got any links and also what time frame?
Date: 11/2/2008
Author: Stephen Wisenthal
Source: The Australian Financial Review --- Page: 19
Record prices for Australian coal have resulted from recent floods in Queenslandand the Chinese snowstorms. These short-term issues are balanced by longer termissues of increasing demand and improving transport infrastructure. The highprices have pushed the GlobalCoal index to a record $US125.48 on 8 February2008. Australian coal companies are attractive investments due to the high coalprice, with particular attention on Macarthur Coal, Centennial Coal and FelixResources. The coal industry is more resilient than other resource stocks due tothe continuing demand for heating fuels
Smurf1976
24th-February-2008, 11:18 PM
Does anyone know what's happening with Australian domestic (as opposed to export) coal prices? I'm assuming they are lower than export given the shipping constraints etc.
noirua
25th-February-2008, 04:10 AM
Outlook 2008: Why Coal - The World's Forgotten Fossil Fuel - is About to Double in Price: http:www.moneymorning.com/2008/02/14/outlook-2008-why-coal-the-worlds-forgotten-fossil-fuel-is-about-to-double-in-price/
imajica
25th-February-2008, 07:50 AM
I'm really glad I bought into AQA a few months back - established diversified producers , especially those with both coal and iron ore exposure will kick ass in 2008
noirua
25th-February-2008, 10:14 AM
Does anyone know what's happening with Australian domestic (as opposed to export) coal prices? I'm assuming they are lower than export given the shipping constraints etc.
Quite a lot of Aussie Power Stations have their own coal reserves, and train and truck the coal in. OneSteel has an agreement with BHP where they use the same trains, back and forth, for coal, iron ore, pellets, pig iron and steel.
noirua
25th-February-2008, 01:26 PM
What a fine Green Coal-Fired Australian Power Station, Koogan Creek, nr Chinchilla, QLD.
Outlook 2008: Why Coal - The World's Forgotten Fossil Fuel - is About to Double in Price: http:www.moneymorning.com/2008/02/14/outlook-2008-why-coal-the-worlds-forgotten-fossil-fuel-is-about-to-double-in-price/
Do u know what i think there will be an engery crisis in coming years, and it will be electricity & coal, oil to a lesser extent as coal is the most used for enegy needs. And yes its a need not want, so very hard to reduce our energy needs in this modern age
Its the capacity thats the problem rather than "runnign out" so to speak
thx
MS
osmosis
26th-February-2008, 10:43 PM
Which company is Australia's blue chip coal producer?
noirua
27th-February-2008, 01:06 PM
Which company is Australia's blue chip coal producer?
All the big miners, including Wesfarmers, have been mopping up the small and medium coal producers. Only company with a prospect of reaching the ASX100 that is only producing coal is Felix Resources, as 70% of the stock is owned by substantial holders. They may make it around 2012/13.
noirua
1st-March-2008, 10:34 AM
"Coal prices to decline as China resumes exports", and may affect negotiations on coal prices that normally conclude in March: http://mjunction.in/market_news/coal_1/coal_prices_to_decline_as_chin.php
Price of thermal coal out of Newcastle port fell US$4.71 to $134.45 a tonne for weekending 22/2/2008.
michael_selway
1st-March-2008, 12:44 PM
"Coal prices to decline as China resumes exports", and may affect negotiations on coal prices that normally conclude in March: http://mjunction.in/market_news/coal_1/coal_prices_to_decline_as_chin.php
Price of thermal coal out of Newcastle port fell US$4.71 to $134.45 a tonne for weekending 22/2/2008.
Well a ST pull back would be reasonable ince its gone nuts in the last few months. :)
thx
MS
Coal prices to decline as China resumes exports
February 29, 2008: Taiwan Power Co reported that the fuel's cost will drop after China restores exports in April. This will release the pressure on buyers to resolve term negotiations at double the price last year.
According to the head of the company's thermal coal unit, Albert Jen, at the McCloskey Group conference, the Chinese exports' resumption after a two month ban and reduced rainfall in Indonesia will enhance supplies.
Taiwan Power is awaiting the conclusion of price discussions of Japanese utilities with Australian sellers before talking with its suppliers, he added. Coal prices witnessed a hike after the heavy rains in Australia, snowstorms in China and power shortages in South Africa led to a decreased output.
"The Japanese could delay negotiations and wait for spot prices to fall. The next few weeks will be crucial because the talks usually conclude in March," mentioned Jen at Taipower.
Source: The Financial Express
noirua
1st-March-2008, 12:51 PM
Well a ST pull back would be reasonable ince its gone nuts in the last few months. :)thx MS
Fair enough m_s, FLX profits at US$140 a tonne would be about $600 million in 2009/10, and going up to $2.5 billion when Moolarben gets to full production in 2012/13. This won't happen and 2008/9 prices will/may be around US$105 for thermal and will drop back further as ports expand at the latter end of 2009 - make hay whilst the sun shines.
michael_selway
2nd-March-2008, 10:22 PM
Fair enough m_s, FLX profits at US$140 a tonne would be about $600 million in 2009/10, and going up to $2.5 billion when Moolarben gets to full production in 2012/13. This won't happen and 2008/9 prices will/may be around US$105 for thermal and will drop back further as ports expand at the latter end of 2009 - make hay whilst the sun shines.
Yep it will be interesting going forward inthe comign years
It's black and dirty, but that's not stopping coal from being hailed by miners and investors as "the new gold." Soaring prices, driven by Asian demand for power and aided by production shocks in coal-exporting countries, lie behind a global stampede to secure supplies for power generation and to make steel. "It's like the California gold rush," says Michael O'Keeffe, chief executive of Riversdale Mining, an Australian company exploring for coal in the southern African country of Mozambique.
Late last year one of India's biggest companies, Tata Steel, joined the search by paying Riversdale $91 million for a minority stake in a small portion of an exploration prospect in northwest Mozambique. It will be several years, at the earliest, before coal is mined at Benga on the banks of the Zambezi River, but Tata moved early to ensure its future entitlement to what was once regarded as an abundant commodity.
"There is a global shortage of both thermal (to generate electricity) and coking coal (to make steel)," says O'Keeffe, 56, who grew up in Cairns, Australia. "Indian demand for steel, and hence coking coal, is going through the roof. We've always believed that you'll be able to find iron ore for steel, but it's much harder to get coking coal."
Riversdale's coal discovery in Mozambique, coupled with its Tata deal, has put a rocket under its share price. Over the past 12 months Riversdale stock has more than tripled, even after a recent fallback. Riversdale is generating a small annual profit from a coal mine it acquired two years ago in South Africa, but the real game is its big discovery in Mozambique.
Different types of coal mean there is no common price. However, as a rough guide, prices for both thermal and coking coal have more than doubled over the past year (see chart) and are tipped to rise further.
Mark Pervan, senior commodity strategist in the Melbourne office of the Australia & New Zealand Banking Group, says the most recent sales of coking coal have been around $270 a tonne, more than double 12 months ago. Thermal coal has nearly tripled in price in the same span. By comparison, gold, which O'Keeffe reckons is being replaced by coal as the prospector's favorite, has captured attention by rising all of a third over the past 12 months to $920 per ounce.
"Iron ore is driven by demand, but the coal market is being largely driven by supply shortage," Pervan says. "Key global producers Australia, China and South Africa are grappling with weather-related disruptions. These supply problems, together with rising demand throughout Asia, are likely to keep a high floor on prices. Slowing exports out of Indonesia and Vietnam are also affecting the market, with Vietnam diverting output to meet stronger domestic demand."
Ironic, perhaps, at a time when the world is consumed with notions of carbon energy caps and nonfossil fuels, but old King Coal has never burned as hot. Today as an energy source, it accounts for an estimated 24% of global energy consumption, and 39% of electricity production.
China, traditionally a coal exporter, has banned coal exports over February and March to ensure it has enough to meet domestic demand for electricity production after being hit by a deep freeze and record-breaking snowstorms. Preston Chiaro, chief executive in London of the energy division of big miner (and takeover target) Rio Tinto, is surprised by the surge in prices. Rio Tinto is one of the world's biggest coal miners, with operations in North America and Australia. In the year to Dec. 31 it mined 156 million tonnes of coal, mainly thermal for power generation. "It's been a confluence of events," Chiaro says. "Weather is the big story, with rain in Australia and snowfalls in China. We had seen some tightness in the market before, but those two events really brought it to a head."
Flooding in open-pit coal mines in Australia over January and February forced five coal exporters, including Rio Tinto and Xstrata (other-otc: XSRAF.PK - news - people ), to declare force majeure, by which a company can blame events beyond its control for failing to fulfill a contract. Chiaro says the price rises were a warning shot of an ongoing coal shortage, not the vagaries of a temporary weather pattern. "The infrastructure for moving coal is really strained, so even small disruptions can have a big effect."
One of his headaches is the clogged Australian rail and port system. Over the past two years more than 50 ships have been riding daily at anchor off the major coal export ports of Newcastle, Gladstone and Dalrymple Bay waiting their turn to load. The record, according to The Australian newspaper, which visited each port to count ships at anchor, was 71, set on Apr. 28 last year
Another leading coal-mining country may also soon be exporting less. In January South Africa suffered severe blackouts when its state-owned power utility, Eskom, failed to generate enough electricity to meet demand. During a week of turmoil South African households were left in the dark, shops closed and tourists traumatized.
Blame for the power outages was put on a lack of investment in new power stations and problems with low-grade coal. Part of the solution is for Eskom to buy 45 million tonnes of extra coal to replenish its depleted stockpiles. Some of that coal was earmarked for export but will not now available.
It's a similar story in Vietnam, which plans to reduce coal exports by about 10 million tonnes a year, a 32% cut, to save coal for domestic use. And Bali has also experienced power outages from coal shortages.
An unnamed Vietnamese government official told Reuters on Feb. 15 that a number of new coal-fired power stations would begin operating this year. "The plan is to gradually reduce exports and eventually stop all coal exports to meet domestic consumption only," the official was quoted as saying.
South Africa's power crisis is music to the ears of people like O'Keeffe. He was planning to start the Benga joint venture with Tata by exporting coking coal to India but is now dusting off plans to start operations by delivering coal to a "mine-mouth" power station, which would burn lower-grade thermal coal and sell electricity into a grid that connects Mozambique with South Africa.
"We were targeting metallurgical coal," O'Keeffe says. "But what we might now do, provided we line up all our ducks, is get into coal production for a power station fairly quickly because we don't have to wash [remove impurities] that type of coal."
O'Keeffe, a former managing director in Australia for the big commodities trader Glencore, said his Indian partner, Tata, would not object to the potential for a thermal-first option because it could mean getting to the deeper coking coal quicker.
Paul Mazak, managing director of Churchill Mining, a London-listed explorer with coal assets on the Indonesia island of Kalimantan, said two countries dominated demand for coal in Asia. "They're the usual suspects, China and India," he says.
Churchill is in a similar position as Riversdale in that it has an asset in the ground but is yet to start mining. Despite its embryonic position as an explorer, Churchill is being inundated with inquiries from coal buyers hunting supplies. "The reason they're knocking on our door, even though we've yet to produce anything, is that buyers have now realized that it's no longer a buyer's world, it's a supplier's world," Mazak says. "They want long-term security of supply, which means they want to get involved with the mines, and the earlier the better."
O'Keeffe's plans for Mozambique have their roots in his background as a commodities trader with Glencore, where he had oversight of its coal business and where he learned all the intricacies of mining, exporting and trading coal. After quitting Glencore in 2004 O'Keeffe struck out on his own. "I left to start doing for myself what I'd been doing for Glencore," he says. "I'd completed what I'd been hired to achieve for Glencore, which was to be the number one trader in Australia."
Within days of his departure Riversdale was created, with coal as its primary focus. After looking around the Australian landscape O'Keeffe opted for greener pastures. "Australia has too many junior companies competing for limited opportunities," he says. "All of the big assets are held by majors. No junior explorer is discovering world-class assets in Australia. We reckoned it was best to chase elephants [big assets] in elephant country, and that means Africa. It is also fairly obvious that Africa has close proximity to India, which is at the start of a supercycle of growth for steelmaking. That makes our chosen location for exploration and mine development even more compelling."
not alot wrtten about emeging coal explorers/producers Did a bit of research about RCI but can't remeber where i posted it !
RCI recently bought a Chinese mine and also have exploartion going on in Aus.At 17c a cheap play. Only down side i can see is a Whopping 50 million dollar loan to a chinese business man. Sounds a bit sus Does anyone have nore info on RCI that is not available on their website ?
anythoughts on Bowen BWN ?
michael_selway
11th-April-2008, 11:26 PM
not alot wrtten about emeging coal explorers/producers Did a bit of research about RCI but can't remeber where i posted it !
RCI recently bought a Chinese mine and also have exploartion going on in Aus.At 17c a cheap play. Only down side i can see is a Whopping 50 million dollar loan to a chinese business man. Sounds a bit sus Does anyone have nore info on RCI that is not available on their website ?
anythoughts on Bowen BWN ?
BHP has agreed a price increase, for hard coking coal, from 1st April 08 at US$300 per tonne, up from last years US$98 per tonne: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=askuT7WqoKRI
noirua
15th-April-2008, 11:38 AM
China's Shenhua Energy willing to accept US$135 per tonne on long-term thermal coal contracts: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKc6iA4iyr.c
michael_selway
21st-April-2008, 07:42 PM
China's Shenhua Energy willing to accept US$135 per tonne on long-term thermal coal contracts: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKc6iA4iyr.c
Hi Noirua, thanks for the update
I also noticed the spot thermal coal price up again this week
anyone else notice that some of the green stocks today were mostly coal?
CEY
MCC - takeover << that was under $10 not long ago :banghead:
also some junior explorers, BWN and RCI up 13% respectively
demand > supply
Aussiejeff
23rd-April-2008, 05:42 PM
Crikey!!
Report in the news today that China ONLY HAS 12 DAYS COAL RESERVES LEFT - down another 3 days from the last estimate. Ominously a bit like the Doomsday Clock ticking....
What is the solution to a possibly catastrophic shut-down of their energy rapacious economy?
AJ
michael_selway
23rd-April-2008, 07:00 PM
Crikey!!
Report in the news today that China ONLY HAS 12 DAYS COAL RESERVES LEFT - down another 3 days from the last estimate. Ominously a bit like the Doomsday Clock ticking....
What is the solution to a possibly catastrophic shut-down of their energy rapacious economy?
I'd love to know what the Chinese Government means by "we are working" on the problem. Seems that nothing they have done so far (eg: paying "crazy" price increases for urgently needed coke and coal shipments to cover their internal production shortfalls) has stopped China from getting desperately close to this critical shortage.
We all better pray that no disaster(s) befall their coking/coal production capacity in the near future! :(
AJ
michael_selway
24th-April-2008, 12:05 PM
Another link to the Shanghai Daily referring to China's pending coal shortage...
I'd love to know what the Chinese Government means by "we are working" on the problem. Seems that nothing they have done so far (eg: paying "crazy" price increases for urgently needed coke and coal shipments to cover their internal production shortfalls) has stopped China from getting desperately close to this critical shortage.
We all better pray that no disaster(s) befall their coking/coal production capacity in the near future! :(
AJ
Hm world shortage would be a scary thing, imagine no light and electricty in Australia! Is this possible?
thx
MS
Aussiejeff
24th-April-2008, 02:48 PM
Hm world shortage would be a scary thing, imagine no light and electricty in Australia! Is this possible?
thx
MS
Hey, no problemo amigo! It would seem not many ASF posters seem worried enough by this news to venture any opinion on what effect they might see it having on us here in Oz (and the rest of the world for that matter) IF China is forced to drastically reduce economic demand/output within a couple of weeks as a result of their coal reserves running out - obviously a worst case scenario.
IF that happens, I postulate that the fallout from Sub-Prime that shook world financial markets to the core will seem like a picnic in the park on a sunny day in comparison to the gloooom that would ensue from a sudden, severe Chinese economic downturn due to energy shortages. I guess time will tell. At least we won't have to wait long to see whether they can literally dig themselves out of the looming black hole. Say, when are the Olympics due to run? Opening Ceremony on 8th August. With the rate their coal reserves are dwindling, they might be lighting candles to run events by....
AJ
michael_selway
3rd-May-2008, 03:51 PM
Hey, no problemo amigo! It would seem not many ASF posters seem worried enough by this news to venture any opinion on what effect they might see it having on us here in Oz (and the rest of the world for that matter) IF China is forced to drastically reduce economic demand/output within a couple of weeks as a result of their coal reserves running out - obviously a worst case scenario.
IF that happens, I postulate that the fallout from Sub-Prime that shook world financial markets to the core will seem like a picnic in the park on a sunny day in comparison to the gloooom that would ensue from a sudden, severe Chinese economic downturn due to energy shortages. I guess time will tell. At least we won't have to wait long to see whether they can literally dig themselves out of the looming black hole. Say, when are the Olympics due to run? Opening Ceremony on 8th August. With the rate their coal reserves are dwindling, they might be lighting candles to run events by....
Interesting to see how the town of Mudgee, NSW, are expanding and updating on the back of the coal boom.
"Mudgee taking off": http://mudgee.yourguide.com.au/news/local/news/general/mudgee-taking-off/767840.aspx
noirua
14th-May-2008, 10:24 PM
Splendid news from the budget as half of the $41 billion goes into building and infrastructure, much along the East Coast. Supply constraints at Newcastle, a national embarrassment, will see money poured into improving present supply constraints: http://www.abc.net.au/worldtoday/content/2008/s2244567.htm
Nick Radge
15th-May-2008, 10:29 AM
noirua, is that why some of the coal stocks are firm today, namely CEY, CZA and NHC?
MRC & Co
15th-May-2008, 12:42 PM
Yeh, I thought the same as Noirua as soon as I heard the Budget!
Nick, I imagine it would have an impact (thought not sure which particular infrastructure is being upgraded and which those companies you name use).
Sure one of the F/A coal buffs here could shed some light?
noirua
16th-May-2008, 10:01 AM
noirua, is that why some of the coal stocks are firm today, namely CEY, CZA and NHC?
There are a lot of new coalmines coming into production in NSW and Queensland. Rail services need upgrading to the port of Newcastle, NSW and to the Gladstone Port in Queensland. Newcastle Port is seeing a 65% upgrading by 2010 and the coal must get there on upgraded rail lines. Gladstone has been upgraded and there is now a scramble to get the coal to the ports, but the rail services are just not there at times to Queensland's more Northern Ports. The coal Port of Abbotts Point is also being expanded.
All of the major mining companies have new mines coming onstream as well as the medium size and minnows in the coal sector.
michael_selway
18th-May-2008, 04:01 PM
noirua, is that why some of the coal stocks are firm today, namely CEY, CZA and NHC?
Has any one got something to share on RIV ? The company shot to $8.40 in 12 months and has the huge reserve .
Regards
Smurf1976
18th-May-2008, 11:35 PM
Hm world shortage would be a scary thing, imagine no light and electricty in Australia! Is this possible?
thx
MS
Always possible to have a (power) system collapse with or without a fuel shortage.
I'd better not post the specific details (national security and all that) but there are individual fuel sources (mines, processing plants etc) which would plunge one or more states into outright crisis if something happened. That something could be as simple as an accident, fire or even just a breakdown.:2twocents
michael_selway
23rd-May-2008, 11:02 PM
Has any one got something to share on RIV ? The company shot to $8.40 in 12 months and has the huge reserve .
Regards
Yep its not bad, maybe just a little expensive, but huge resource
Plenty posts above talk about a shortage crisis......this is quoted from the WorldEnergy Survery of Energy Resources:
"As this Survey shows, coal is plentiful, widely
distributed and likely to be in continuing, and
increasing, demand for the foreseeable future."
AND see below extract from Wikipedia
"World coal reserves
At the end of 2006 the recoverable coal reserves amounted around 800 or 900 gigatonnes. The United States Energy Information Administration gives world reserves as 998 billion short tons[27] (equal to 905 gigatonnes), approximately half of it being hard coal. At the current production rate, this would last 164 years.[28] At the current global total energy consumption of 15 terawatt,[29] there is enough coal to provide the entire planet with all of its energy for 57 years.[original research?]"
Then consider the following:
"Underground coal gasification allow access to more coal resources than economically recoverable by traditional technologies. By some estimates it will increase economically recoverable reserves by 600 million tonnes"
http://en.wikipedia.org/wiki/Underground_Coal_Gasification
Another case of inaccurate information on a Wiki site!
THAT SHOULD CORRECTLY READ "600 BILLION TONNES"....check out the original source:
http://www.worldenergy.org/documents/ser2007_final_online_version_1.pdf
(2007) Survey of energy resources (PDF), 21, World Energy Council (WEC), 7. ISBN 0946121265
*** In other words, a 600bn increase (via UCG) to 990bn present coal reserves is a 60% increase in potential supply
*** Assuming there was no preference in use between either UCG or present coal reserves - then I believe there would be a correction in the price of coal
*** However, Linc Energy has shown that the cost of extracting energy from coal via UCG is much cheaper than with open mines + the added benefits of a much cleaner (greenhouse friendly) process.
*** In the future, I see a seismic shift towards UCG coal mining for this very reason, massive potential reserves out there + in terms of the carbon trading scheme - since you won't be polluting that much, you have an incentive to undertake UCG and therefore dont pay much for carbon credits
carbonneutral.com.au
"What is the cost to offset 1 tonne of CO2e? Price per tonne of CO2e for organisations offsetting more than 20 tonnes CO2 is $18 and for individuals it is $19."
That's an extra $20 / tonne incentive to CSG companies.
CONCLUSION ---> The coal sector is heading to cleaner energy. CSG has many price advantages + 'clean benefits' (with policy backing).
- Since the potential CSG reserves as estimated in the WorldEnergy Survey Report (length @ 600 pages ... if you have time) are 600Bn tonnes OR which would add ~ 60% to present World Coal Reserves...in terms of supply/demand, I would expect the coal price to ease off.
***So in other words, it might be a rush to find CSG deposits (which would ceteris paribus have higher NPV project values considering extraction costs / carbon credits
--------------------------------------------
Michael,
I notice above you have 17 companies with CSG exposure in your signature...are you keeping track of their resources? (proven / potential?)
WHAT DO YOU ALL THINK?
dj_420
24th-May-2008, 09:07 AM
Michael,
I notice above you have 17 companies with CSG exposure in your signature...are you keeping track of their resources? (proven / potential?)
WHAT DO YOU ALL THINK?
I know you asked Michael but I will provide some input, I have studied the coal companies list Michael provided us and identified that CEY has significantly more resources than other companies, CEY has around 2.5 billion tonnes of thermal/coking coal.
Now the reason CEY is been held down is due to almost all of their coal sales been on long term contracts, however it is very interesting to note that these contracts start winding down over the next two years making more and more coal available for overseas exports.
CEY currently producing around 15 million tonnes per year which puts them near the top of the list in terms of amount produced.
IMO over the next few years as their production capacity expands and are able to sell more onto the spot market we will see a substantial increase in earnings. As it is next year I think they are estimated to be on a PE of 8 as compared to 15 this year.
mrgroundwork
24th-May-2008, 10:36 AM
Caledon Mining (CCD) listing on the 4th June... huge assets in the QLD Bowen Basin... heading into large producton phase over the next year or so... dual listed on the AIM/ASX... IPO was ridiculously oversubscribed...
check out their new technology they are using as well for extracting the resource... it is very interesting...
rick62
24th-May-2008, 11:56 AM
Any thoughts on how sustainable the recent success of a number of coal stocks might be?
I am thinking in particular of FLX, GCL and CEY. There may well be others.
Can this level of growth be maintained?
Not asking for crystal ball gazing but it seems there are some exceptionally coal-knowledgeable contributors to this thread.
Thanks
Rick
Yes, interesting read, thanks for the link and info Spineli.
For those who want to have a quick read of the UCG and GTL reviews, open link and go to pages 15 and 19.
Also found this interesting on page 35-
Australia
Proved amount in place (total coal,
million tonnes)
97 300
Proved recoverable reserves (total
coal, million tonnes)
76 600
Production (total coal, million
tonnes, 2005)
378.8
Australia is endowed with very substantial coal
resources, with its proved recoverable reserves
ranking 4th in the world. The major deposits of
black coal (bituminous and sub-bituminous) are
located in New South Wales and Queensland,
especially in the Sydney and Bowen basins;
smaller but locally important resources occur in
Western Australia, South Australia and
Tasmania. The main deposits of brown coal are
in Victoria, the only State producing this rank.
Other brown coal resources are present in
Western Australia, South Australia and
Tasmania
And a little more on page 36-
In 2005 Australia produced 308 million tonnes of
saleable black coal (bituminous and subbituminous)
and 71 million tonnes of brown coal.
The major domestic market for black coal is
electricity generation: in 2004, power stations
accounted for 85% of total black coal
consumption, with the other major consumer
being the iron and steel industry. Brown coal is
used almost entirely for power generation.
Australia has been the world's largest exporter
of hard coal since 1984: in 2005, it exported 233
million tonnes. About 54% of 2005 exports were
of metallurgical grade (coking coal), destined
largely for Japan, the Republic of Korea, India
and Europe.
michael_selway
26th-May-2008, 07:54 PM
Any thoughts on how sustainable the recent success of a number of coal stocks might be?
I am thinking in particular of FLX, GCL and CEY. There may well be others.
Can this level of growth be maintained?
Not asking for crystal ball gazing but it seems there are some exceptionally coal-knowledgeable contributors to this thread.
Thanks
Rick
Hi there's a good report out by Patterson's whichgives insight of those coal stocks you have mentioned
Hi there's a good report out by Patterson's which gives insight of those coal stocks you have mentioned...MS
Many thanks Michael - a veritable smorgasbord! I just scanned the Patterson link. It added to my confusion - but that's my problem. Obviously I need to study this a lot more than I have.
Cheers
Rick
rick62
29th-May-2008, 10:28 PM
Hi there's a good report out by Patterson's whichgives insight of those coal stocks you have mentioned
But it does look bullish even from here onwards. Also some new addtions to teh coal list!
MS
Hi Michael
I just had another look at the Paterson article which seems to have been published very recently [May 16].
They rated COK as a buy; FLX and MCC as Holds; and GCL as as a sell.
Your comment "does look bullish" looks spot on at this time.
Have I got this right?
Patersons gave:
The SP of COK as $0.92; PT $1.74. It is now $1.115. Up 25%.
The SP of FLX as $16.66; PT $12.31. It is now $21.69. Up 30%.
The SP of MCC as $17.39; PT $16.70. It is now $19.33. Up 11%.
The SP of GCL as $9.97; PT $7.40. It is now $12.40. Up 24%.
IF I'm right you couldn't complain about any of them.
Question seeking opinions in answer [not recommendations I know]: Where is the best substance / value in TA and FA terms for the longer-term investor? [Like some watchful retirees I know...]
Comments appreciated from anyone.
Thanks
Rick
michael_selway
30th-May-2008, 12:05 AM
Hi Michael
I just had another look at the Paterson article which seems to have been published very recently [May 16].
They rated COK as a buy; FLX and MCC as Holds; and GCL as as a sell.
Your comment "does look bullish" looks spot on at this time.
Have I got this right?
Patersons gave:
The SP of COK as $0.92; PT $1.74. It is now $1.115. Up 25%.
The SP of FLX as $16.66; PT $12.31. It is now $21.69. Up 30%.
The SP of MCC as $17.39; PT $16.70. It is now $19.33. Up 11%.
The SP of GCL as $9.97; PT $7.40. It is now $12.40. Up 24%.
IF I'm right you couldn't complain about any of them.
Question seeking opinions in answer [not recommendations I know]: Where is the best substance / value in TA and FA terms for the longer-term investor? [Like some watchful retirees I know...]
Comments appreciated from anyone.
Thanks
Rick
Hm it depends on whats the best value (for the future) at current prices
Its funny cause Ken Talbot just sold a lot of MCC shares and then bought RIV shares (see annoucement below!)
So, in an even greater state of confusion, it's time for bed.
Thanks Michael.
R
rick62
30th-May-2008, 05:09 PM
This needs a wiser head than mine:
Towards the day’s end I lodged a buy order for GCL at $12.36, 4c below the day’s open. High had been $13.03 . At 4pm the price was $12.40. At 4.10pm it still showed $12.40. Then a contract note came through saying I had bought at $11.76 - a new day’s low. Checked again and there was a new close of $11.76 at 2 seconds before 4.11pm and again at 4.20pm. So we had a lower volume day than yesterday, a lower low and a higher high. But how can the SP drop a further 9% after close? Ridiculous. No announcements that I can find...
YOUNG_TRADER
17th-June-2008, 11:58 PM
I got to get me alot more coal plays as I have but a few
Thanks for the info guys
michael_selway
18th-June-2008, 10:42 PM
I got to get me alot more coal plays as I have but a few
Thanks for the info guys
Hi YT, you have a few? which ones :)
Btw have you looked at CDS & AVA today? unbelievable turn around :)
NHC is a coal mining company firmly stamped
with the financially conservative DNA of 61%
shareholder, Washington H. Soul Pattinson (SOL). A
conservative balance sheet makes NHC master of
its own destiny and gives management freedom to
be counter cyclical. Production is primarily export
thermal, with a smaller component of domestic
thermal coal. Most is mined at Acland which has
low costs and a long life. Reserves of 235Mt are
supportive of growth to at least 10Mt a year in
the medium term compared to over 4Mt now.
Jeebropilly and Oakleigh near Ipswich provide
smaller contributions but cash costs are higher,
reflecting limited life and simultaneous land
development. Like sister company Brickworks (BKW),
NHC turned the encroachment of urban areas on
mining into a positive. Land development maximises
returns from sunk capital costs, offers diversification
and potentially a steady earnings stream to counter
cyclical coal earnings. Longer term growth will come
from coking coal via New Saraji.
Our $6.40 a share valuation is made up primarily
of two parts, the thermal coal business – mostly
Acland – and New Saraji. Thermal coal accounts
for $2.25 or 35% while Saraji is $3.25 or 51%. The
remainder is net cash, a 17.7% Arrow Energy (AOE)
shareholding, exploration projects and land, net of
corporate expenses. Long term assumptions are
US$60/t thermal coal, US$100/t coking coal, an
A$/US$ exchange rate of 0.80 and a 10% discount
rate. Deriving half the valuation from an exploration
project is of some concern but New Saraji covers
extensions to BHP’s mine which lowers resource and
coal quality risks.
Our FY08 NPAT forecast of $79.1m assumes NHC
meets production guidance of 4.4Mt of coal,
average US$65/t export thermal coal and an A$/
US$ exchange rate of 0.90. FY09 profit will be
significantly stronger with the record thermal coal
contract price of US$125/t from April 2008, more
than double 2007’s US$55/t. Our $154.7m forecast
assumes 10% production growth, US$103/t export
thermal coal and an A$/US$ exchange rate of
0.93. Unlike most coal companies, NHC’s has many
contracts with prices settling throughout the year.
This smooths prices and means contract changes
take a year for the full impact to flow through. The
recent US$125/t settlement won’t take full effect
until FY10, when we expect earnings to approach
30c a share. Coal prices are forecast to decline to
our US$60/t long term assumption by 2014, with
NHC to see that price in FY16. Medium term land
development earnings and Acland volume growth
broadly offset lower margins beyond FY10 if coal
prices decline to our long term forecast.
Persistent infrastructure tightness will boost
the outlook. Energy is vital and somewhat price
insensitive. The market expects contract thermal
coal to fall next year but it could surprise on the
upside. Spot prices out of Newcastle touched
US$150/t last week versus the US$125/t April 2008
settlement. The high oil price is driving demand for
vastly cheaper coal. Our assumption of stable prices
until April 2010 could be conservative and thermal
coal may well be higher next year.
Domestic coal sells to local power stations. Export
coal is railed to Brisbane on by Queensland Rail
(QR). Capacity is limited by QR rolling stock, train
size and competing Brisbane metro rail services.
Despite this, incremental gains continue to be won.
Rail capacity is expected to top out at 10-14Mt a
year, compared to 5Mt now. Exports are via wholly
the owned Queensland Bulk Handling (QBH) port.
QBH is under long term lease from the Port of
Brisbane. Stage 1 expansion from 5Mt to 7Mt is
set to finish October 2010. A likely Stage 2 will lift
capacity to 10Mt.
QBH serves just two customers, NHC and US major
Peabody. NHC should continue to secure capacity
for mine expansions. Efficient management and low
shiploader utilisation sees QBH demurrage free.
Customers love NHC’s reliable supply. Despite being
NHC mines thermal coal primarily
from Acland, 140km west of
Brisbane, a mid-low cost, long
life mine. Smaller contributions
are from Jeebropilly and
Oakleigh near Ipswich where
land redevelopment offers a
potential new earnings stream
after closure. Group production
is 5Mt a year, 70% export and
30% domestic. Exports are
through a 100% owned facility
in Brisbane. Near term growth
is from Acland exports. New
Saraji in central Queensland’s
Bowen Basin will add coking
coal in the longer term. Coal
seam gas and coal to liquids are
early stage but may be important
longer term. Management is
astute, focused on cashflow,
dividends and sensible long term
investment. The balance sheet
is strong with no debt and over
$100m cash. Single commodity,
infrastructure and mining risk
require consideration.
Huntleys’ Your Money Weekly 5 June 08 19
a small port – 5Mt a year versus 55Mt at Dalrymple
Bay – QBH is low cost. Central Queensland
producers suffer much higher port fees at Dalrymple
Bay. The few dollars NHC saves on each tonne of
coal helps build a moat.
Longer term growth is driven by high grade coking
coal from New Saraji. New Saraji covers the
underground extensions to BHP’s Saraji mine.
Resources of 690Mt are already sufficient to support
a world class coking coal mine. Management’s
ultimate resource target of 1.5Bt looks achievable.
Starting 2011, planned production rises to 10Mt
a year by 2017, making NHC a significant export
coking coal player. The global seaborne coking coal
market is just over 200Mt a year. The timetable to
full production at Saraji looks conservative, but is
prudent given Queensland infrastructure issues.
If the boom roars for the next decade and access
to infrastructure remains problematic, coal prices
will be higher. Acland, with secure access to QBH,
effectively hedges potential delayed Saraji earnings.
Higher coal prices increase New Saraji’s
attractiveness to established miners, particularly
miners with infrastructure access but short mine
life. NHC could sell a portion of New Saraji equity
to cover NHC’s share of capital costs and reduce
financial risk. Neighbour BHP is the logical partner.
Instant underground access from BHP’s opencut
and use of existing coal processing capacity offers
significant capital cost savings. BHP is also the
dominant coking coal exporter.
The exploration portfolio includes Darling Downs,
Bee Creek and New Lenton. Darling Downs covers
4500 square kilometres Around Acland in the Surat
Basin. It is prospective for shallow open thermal
coal deposits for export, domestic power generation
and coal to liquids. Bee Creek in the Northern
Bowen Basin is in close proximity to operating mines
and has coking coal potential. New Lenton covers
depth extensions to Peabody’s Burton mine which
produces coking and thermal coal. Resources of
84Mt at Lenton and 9Mt at Bee Creek are limited
only by drilling. NHC also has an option on coal
seam gas via a 17.7% interest in Arrow Energy.
Market value is over $400m. Shell’s agreement
to invest up to $776m in Arrow for a 30% stake
is another endorsement of coal seam gas by an
overseas energy major.
Julia
18th-June-2008, 10:51 PM
I don't want to put anyone in the position of being accused of ramping, but if I'm looking at CEY, GCL and MCC, is there a stand out one here, and if so why?
I already have FLX.
There seems to be so much good stuff to choose from in coal stocks so I'd be really appreciative of any opinions here.
With thanks.
Julia
michael_selway
18th-June-2008, 11:39 PM
This needs a wiser head than mine:
Towards the day’s end I lodged a buy order for GCL at $12.36, 4c below the day’s open. High had been $13.03 . At 4pm the price was $12.40. At 4.10pm it still showed $12.40. Then a contract note came through saying I had bought at $11.76 - a new day’s low. Checked again and there was a new close of $11.76 at 2 seconds before 4.11pm and again at 4.20pm. So we had a lower volume day than yesterday, a lower low and a higher high. But how can the SP drop a further 9% after close? Ridiculous. No announcements that I can find...
Yeah there is some soem volatility in the coal stocks in general because of how much they have gained this year
I don't want to put anyone in the position of being accused of ramping, but if I'm looking at CEY, GCL and MCC, is there a stand out one here, and if so why?
I already have FLX.
There seems to be so much good stuff to choose from in coal stocks so I'd be really appreciative of any opinions here.
With thanks.
Julia
Most coal stocks fell today, so mayhave been a good buying opportunity
Shortage of Miners,
Investment Makes
Output Boost Tough
By KRIS MAHER
June 24, 2008; Page A4
U.S. coal producers have been largely unable to meet growing demand because of a lengthy permitting process, lack of capital investment and a shortage of skilled miners, which will keep supplies tight and prices high.
The underlying industrywide issues are compounded by severe floods in the Midwest, which have stranded barges full of coal and submerged railcars used to haul coal. It isn't clear what impact those interruptions will have on supplies and prices.
Paul Forward, a coal analyst with Stifel, Nicolaus & Co., expects demand for coal in the U.S. to outstrip supply this year by 15 million tons, in large part because of the increase in exports, which shot up 49% through April compared with last year. Constraints to production also played a role in the growing shortfall, he said.
Limited Supply Response
"Despite the strong margins that coal companies are seeing, the supply response has so far been limited," said Mr. Forward. "I think it's probably a couple years worth of time where these markets stay tight."
Up to 40 million tons of potential and anticipated coal production is being held back because of delays in obtaining environmental permits and new safety regulations, estimates David Khani, director of research at FBR Capital Markets Inc. in Arlington, Va.
While 40 million tons doesn't seem significant given that the U.S. produced 1.15 billion tons of coal last year, even small shifts in supply can have a big impact on price. The reason, analysts say, is that a large percentage of coal supply is tied up in multiyear contracts, so there is little slack to make up for production shortfalls. That could force some utilities to buy coal at current high spot-market prices and pass some of those costs on to consumers.
"People are going to get sticker shock when they open their electricity bills this summer and next summer," said Mr. Khani. Price increases will depend on rules in individual states and on the hedging strategies of utilities.
The Midwest flooding is expected to further tighten stockpiles, by taking several million tons of coal offline, said Vic Svec, a senior vice president at Peabody Energy Corp., in St. Louis, the world's biggest coal producer. Peabody expects to produce between 235 million and 245 million tons of coal this year, compared with 238 million tons produced last year. Roughly 10% of that production is high-quality coking coal in Australia.
The supply constraints are most acute in Central Appalachia, which accounts for 25% of the coal mined in the U.S. but has a greater impact on market conditions because coal from the region generates more heat per ton than coal from other areas like the Powder River Basin in Montana and Wyoming.
The spot price of Central Appalachian coal sold to both utilities and steelmakers has tripled in the past year, with coal going to utilities rising to as much as $140 a ton from $44 a ton, and that destined to steelmakers to $300 a ton, from $100 a ton. Coal production in the region declined 2.3% through early June compared with the same period last year, according to an analysis by Mr. Forward of Stifel, Nicolaus of U.S. Energy Information Administration data.
Hard to Increase Output
"In general it's hard in the short run in our business to dramatically increase production," said Thomas Hoffman, a spokesman for Pittsburgh-based Consol Energy Inc., the nation's fifth-largest coal company by production. "It's not like we have a bunch of idle production and we can just turn a key and out it flows like water through a pipe." Consol, which operates 16 mines in Appalachia and one in Utah, is hoping to boost production 10% to 70 million tons this year.
Industry officials say high operating costs are deterring small operators from opening mines to take advantage of high prices and help relieve supply constraints. Even big companies face higher costs associated with safety regulations and the inability to get enough mine workers. Massey Energy Co. said the biggest challenge to its plan to increase production by up to 9% this year is its ability to find and hire 300 to 400 new miners.
Dan Roling, chief executive of National Coal Corp., of Knoxville, Tenn., which operates mines in the Southeast, said the mining industry was reluctant to buy new machinery and develop new mines when prices were lower. "Until these higher prices [arrived], the industry has not been investing," he said.
As a result, mining companies aren't able to take full advantage of the strong demand
US coal stocks drop 1.1 pct from last wk -Genscape
Tue Jun 24, 2008 5:00pm BST
More Business & Investing News... HOUSTON, June 24 (Reuters) - U.S. power plants have 1.1 percent less coal on hand this week than last as summer heat and floods contribute to stockpile depletion, Genscape said Tuesday.
The cushion over inventories last year also fell 1 percentage point to 2.2 percent as of Monday, the industry data provider said.
Heat in the West South Central region and floods interrupting barge traffic on the upper Mississippi River caused drawdowns, Genscape said.
"The stock draw is likely to accelerate over the next two weeks as high temperatures push into the Midwest and Southeast and eastern production declines due to the July 4 holiday," Genscape said.
The heat and floods come against a background of high natural gas prices, which encourage utilities to burn cheaper coal at a greater rate to control costs.
The cushion in days of burn available this year over last fell to one, down one for the second consecutive week. Utilities had 54 days of average coal burn on hand.
Utilities had 150.2 million short tons of coal stockpiled compared with 151.8 million tons last week and 147 million tons in the same week last year.
Mathematical rounding sometimes affects the results, overstating some changes and understating others, Genscape has said. The firm recently revised its model, which altered totals. (Reporting by Bruce Nichols)
MORE than $25 billion was wiped from Australian resources stocks yesterday as falling coal prices and concerns that record oil prices would begin to weigh on global growth started a rush for the exits.
Coal and iron ore miners suffered most as investors hit the sell button amid concerns a seemingly unstoppable surge in oil prices could crimp global growth, The Australian reported.
A drop of about 10 per cent in the spot price of coal in the US, Europe and Australia was the catalyst for many sales and sent shares of Centennial Coal tumbling 14 per cent and Macarthur Coal down 7.7 per cent.
The biggest stock on the exchange, BHP Billiton, was sent plummeting 7 per cent and its $US160 billion takeover target Rio Tinto, which does not have an oil business, fell 7.8 per cent.
Both companies are highly exposed to moves in coal and iron ore prices, which have insulated them recently from sliding base metals prices. That they are reaping record contract price rises for both did not seem to matter.
The on-paper wealth of Australia's richest man, Andrew "Twiggy" Forrest, was taken down a peg or two, his iron ore upstart Fortescue Metals Group, now Australia's third-biggest miner by value, losing 12 per cent.
"The big catalyst for declining resources was that over-the-counter coal price fell in a heap, sending most US coal stocks down," Macquarie Private Wealth associate director David Halliday said.
"You've seen falls in base metals and now in coal. It gets people thinking all these bubbles burst at some point."
The absence of a break in rising oil prices also spurred concerns that the engine room for global growth and commodities demand, China, will at some stage take a hit from surging energy costs. Benchmark New York crude oil futures crossed $145 a barrel in trading last night, leaving the psychologically important $150 level just a stone's throw away.
Illustrating just how contagious a bout of selling can be, energy stocks were not seen as a safe haven and the ASX/S&P200 energy index dropped 4.2 per cent.
The recent health of energy company shares was reason enough for some to get out, figuring prices were probably too high and fearing others were thinking the same thing.
Shares in Australia's biggest dedicated oil and gas company, Woodside, slid 3.9 per cent and Queensland's coal seam methane companies, which are banking on profiting from surging Asian energy demand, were hit harder.
Queensland Gas ended down 5.4 per cent and its LNG export rivals Sunshine Gas and Arrow were down 9.5 per cent and 7.3 per cent, respectively.
Takeover target Origin Energy was little changed, ending at $16.28, supported by a cash offer from British gas giant BG Group.
Origin chief executive Grant King will unveil Origin's response to the bid this morning. Santos also weathered the storm quite well, closing down 3 per cent.
The S&P/ASX 200 materials index, largely made up of miners but including steel makers and chemical makers, finished the day down 6.1 per cent, losing more than $20 billion in value, and the energy index lost about $5 billion.
Canadian coal producers suffered a mammoth meltdown yesterday as the bright prospects that have driven the sector to massive gains began to dim on fears the stocks rose too far too fast and demand may deteriorate.
Concerns that the need for metallurgical coal, which is used to make steel, will weaken, sent units of Fording Canadian Coal Trust plunging 16 per cent.
Analysts and traders said there were no specific developments or events in the steelmaking or the metallurgical coal industry to account for the broad selloff, which also captured Western Canadian Coal Corp., Grand Cache Coal Corp. and diversified miner Teck Cominco Ltd.
However, European spot prices for thermal coal, which is used to generate electricity, suffered the largest one-day drop in three years.
Print Edition - Section Front
Section B Front Enlarge Image
More Report on Business Stories
* The high cost of filling up
* Fugitive hedge fund swindler Israel surrenders in Massachusetts
* Canadian car sales outperform U.S. market
* The party's over for Canadian spendthrifts
* Saskatoon grapples with boomtown pains
* As sales sag, GM's war chest is key
* Go to the Report on Business section
The Globe and Mail
The selloff followed a stunning month-long rally that saw prices gain more than 33 per cent.
The thermal coal price slide, coupled with lingering concerns about the global economy in the wake of what is widely believed to be a U.S. recession, was grounds enough for many coal investors to head for the exits.
Until yesterday, some had taken to calling coal the "other black gold" as prices had skyrocketed on weather related production problems in Australia, China and South Africa, elevating the once-lowly commodity's status among investors.
While contract prices for both thermal and met coal have more than doubled, the sustainability of the record prices remains in question.
One analyst noted that coal stocks have run very hard in the last few months and said expectations that were embedded in the share prices were likely unrealistic.
Fording owns a 60-per-cent stake in The Elk Valley Coal Partnership - Canada's largest met coal operations.
Teck Cominco operates the facilities, owns about 20 per cent of Fording and has a 40-per-cent stake in the Elk Valley operations, giving it a 52-per-cent interest in the overall partnership,
Fording units have more than doubled this year. The company put itself up for sale in late 2007 and said in May that it expects to receive an average of $275 (U.S.) a tonne for its coal for the 2008 coal year. That compares with just $93 a tonne the customers paid last year.
Demand for steel from China has been the main driver of the dramatic met coal price increases.
But some believe the red-hot Chinese economy's growth may begin to slow following the Olympic Games in Beijing this summer.
Other concerns for steel demand come from the dismal outlook for the U.S. auto sector, which is teetering on the brink of collapse due to spiking gasoline prices.
Teck Cominco spokesman Greg Waller said his company has seen no signs of slowing demand for met coal.
"Not at all. Steel prices are quite strong right now and have continued to march up over the last six months or so. What's happening in the U.S. market isn't necessarily a reflection of what's happening in the rest of the world," he said.
Most experts are currently predicting that 2009 will be another strong year for met coal demand and say prices should remain well above historical norms. Pricing for 2010 and beyond is far less clear, however, creating nervous shareholders.
http://www.theglobeandmail.com/servlet/story/LAC.20080703.RCOAL03/TPStory/Business
michael_selway
4th-July-2008, 11:23 PM
is the coal run over? or just a temporary thing?
"The big catalyst for declining resources was that over-the-counter coal price fell in a heap, sending most US coal stocks down," Macquarie Private Wealth associate director David Halliday said.
With comments recently in Australia concerning green issues, it should be remembered that UCC coal technology is being funded greatly by coal mining companies.
Australia will increasingly supply UCC coal as Vietnam reduces exports, due to personal needs.
michael_selway
16th-July-2008, 07:50 PM
With comments recently in Australia concerning green issues, it should be remembered that UCC coal technology is being funded greatly by coal mining companies.
Australia will increasingly supply UCC coal as Vietnam reduces exports, due to personal needs.
Well looks like there's life yet in the Coal sector with BHP announcing a $3.7 Billion Deal
The world's biggest miner BHP Billiton Ltd says it has struck a deal to acquire 100 per cent of the New Saraji project from New Hope Corp Ltd for $2.5 billion cash and $1.2 billion worth of BHP shares in a 50/50 joint venture with Mitsubishi Corp.
"This acquisition is consistent with our strategy to accelerate growth in long life, low cost natural resources with a focus on delivering shareholder value," said BHP Billiton coal president Dave Murray.
New Saraji is an undeveloped metallurgical coal resource located next to the joint venture's Saraji mine near Dysart in Queensland's Bowen Basin.
"New Saraji has extensive high quality metallurgical coal resources," said Mr Murray.
"Subject to the results of further resource exploration and evaluation program to be undertaken by BMA, New Saraji has the potential to be developed into a large scale, high quality metallurgical coal operation."
"New Saraji could also potentially deliver significant synergies due to its proximity to BMA's existing Saraji mine," Mr Murray said.
The acquisition is likely to be scrutinised by regulators and third parties, BHP said.
simartech
18th-July-2008, 10:09 PM
Greetings to all
As a scientist and engineer who has spent 30 years in the coal industry I was impressed by the quality of the data represented. In my view coal has at least another 50 to 80 years of growth and will be limited by the extraction rate and enviromental issues. Coal used in the power industry is converted mainly in what are called supercritical boilers. Over all efficiency of conversion is now over 42%. This is exceptional when compared to other forms of conversion. Even at $300 a ton it sells for $12 per GJ vs over $30 for oil.
It represents a very reliable and consistant base load fuel, and the presence of base load power makes wind turbines possible, the latter supplies spinning reserve and stability to the grid. If this was not the case the frequent stops and starts as well as the high overnight load would make wind turbine grid power impossible.
Coal has recently been demineralised and made into nanopowder so that it an be used directly in gas turbines and diesels. Extending the use will have its technical challenges but it has a high energy density (30 GJ per ton in that form)
I am currently looking at good coal plays I have been impressed by CDS, probably because of the personalities involved. The coal technology employed by ESKOM is very high. SASOL uses the Fischer Tropaz process to produce liguids and this may now be viable. I note that LINC propose to do this with insitu gasification. Your comments would be appreciated.
Cheers Simartech
noirua
23rd-July-2008, 08:51 PM
India's coal industry is set for a 100mtpa shortfall: http://www.brr.com.au/event/48058/indias-mineral-riches-and-mining-laws
noirua
2nd-August-2008, 09:09 AM
Well, well, well, if it isn't good olde George W Bush to push and congratulate the coal lobby. Looks like its green energy out of the window and bring in lots of US Coal from West Virginia. Best way to keep oil prices down...
http://www.necn.com/category/32/14540
michael_selway
2nd-August-2008, 03:36 PM
Well, well, well, if it isn't good olde George W Bush to push and congratulate the coal lobby. Looks like its green energy out of the window and bring in lots of US Coal from West Virginia. Best way to keep oil prices down...
http://www.necn.com/category/32/14540
Mixed news now on coal prices going forward as the outlook changes. Asian companies are now allowing coal stocks to fall in anticipation of further falls in coal prices.
The number of ships waiting at anchor outside the Newcastle Port dropped to 23 last Friday against 30 a week earlier. Wait is now 11.3 days against 13.15 days.
Last week 25 ships left Newcastle bound for: 17 Japan, 4 Taiwan, 2 Malaysia, 1 South Korea and 1 Turkey.
Thermal coal prices have come down from a peak of about US$194 per tonne to US$160.40 last week. Benchmark thermal price was set at US$125 per tonne from 1st April last. Meanwhile the Aussie has dropped from A$1.04 to A$1.09 against the Greenback.
noirua
6th-August-2008, 07:16 PM
With the cash bid for Lonmin by Xstrata coming after the ASX close.
The price for Lonmin was 50% above the London closing price on Tuesday, and this may play well for coal and other mining stocks at the opening tomorrow.
imajica
7th-August-2008, 10:40 AM
quote from AQA's latest announcement:
The Company’s total attributable JORC compliant Measured, Indicated and Inferred
Resources from its coal projects is 2.6Bt of predominantly hard coking coal (please refer to
Aquila’s previous announcements to the ASX, on 26th March 2008, 9th, 11th June 2008 and 1st
July 2008, for detailed resource statements).
2.6 Billion tonnes of hard coking coal is a huge resource - we are talking hundreds of years of mine life
add on another 1/2 a billion tonnes of iron ore and you have a company that is diverse enough to become a big player
recent share market weakness is just a good excuse to top up
noirua
7th-August-2008, 09:58 PM
quote from AQA's latest announcement:
The Company’s total attributable JORC compliant Measured, Indicated and Inferred
Resources from its coal projects is 2.6Bt of predominantly hard coking coal (please refer to
Aquila’s previous announcements to the ASX, on 26th March 2008, 9th, 11th June 2008 and 1st
July 2008, for detailed resource statements).
2.6 Billion tonnes of hard coking coal is a huge resource - we are talking hundreds of years of mine life
add on another 1/2 a billion tonnes of iron ore and you have a company that is diverse enough to become a big player
recent share market weakness is just a good excuse to top up
I notice AQA has only a 24.5% interest in the Belvedere Coal Project 3.8 billion tonnes, and 50% interest in Eagle Downs, 780mt. These potential mines comprise semi-hard coking coal, PCI coal and some thermal products. These potential mines are of course not developed yet.
The Issaacs Mine looks good and will produce 2.6mtpa of predominantly semi-hard cokig coal. AQA has a 50% interest.
noirua
19th-August-2008, 05:57 PM
China are to introduce a 10% export tax on coal to discourage exports. Coke tax raised to 40% from 25% and other coking coals to 10% from 5%: http://www.reuters.com/article/rbssCoal/idUSSHA5694320080818
michael_selway
22nd-August-2008, 12:31 AM
China are to introduce a 10% export tax on coal to discourage exports. Coke tax raised to 40% from 25% and other coking coals to 10% from 5%: http://www.reuters.com/article/rbssCoal/idUSSHA5694320080818
I (bungi2) divided the Market Capitization by the Resource estimates for a number of companies.
Please take into account the different levels of maturity, type of coal,location etc. Also take into account that the coal sector has been smashed over the last couple of months.
Coal miners wait on tenter hooks as Xstrata conclude their October 1st prices for thermal coal, to Japan. They are reported to have given way to pressure on their offer at US$175 per tonne as the Newcastle Port prices drop.
Coal stocks are set to react to the final deal that is thrashed out.
michael_selway
20th-September-2008, 12:31 AM
Coal miners wait on tenter hooks as Xstrata conclude their October 1st prices for thermal coal, to Japan. They are reported to have given way to pressure on their offer at US$175 per tonne as the Newcastle Port prices drop.
Coal stocks are set to react to the final deal that is thrashed out.
Hi yeah looks liek a drop in coal prices thsi week
Australia Sets Up Global Body to Promote Clean Coal
Australia's government set up a A$100 million ($80 million) global clean-coal institute to encourage companies such as BHP Billiton Ltd. to establish low- emissions power projects that help tackle global warming.
Prime Minister Kevin Rudd, who ratified the Kyoto Protocol on his first day in office and wants to cut emissions 60 percent by 2050, announced the plan in Canberra today.
``Our intention with these projects is to reduce greenhouse gas emissions,'' said Rudd, 50. ``This is an important area to achieve real results.''
The government wants to promote projects that use new technology to help reduce emissions of carbon dioxide and other gases blamed for global warming. The institute will promote the development of clean-coal ventures and help them raise funds, Rudd said. Resources and Energy Minister Martin Ferguson said BHP and the Rio Tinto Group back the initiative.
``BHP Billiton is very committed to the reduction of C02 in the atmosphere,'' Chief Executive Officer Marius Kloppers said in an interview today. ``We believe the science is real, we believe it's highly necessary to stabilize C02.''
Australia's upper-house senate is expected to approve legislation allowing the country to set up storage sites off its coast to hold carbon captured during power production, Ferguson said. The House of Representatives passed the legislation yesterday, he said.
Governments may participate in carbon-capture projects, said Rudd, who will brief the United Nations General Assembly on the institute in New York next week.
The aim is to have the institute operating by January, Rudd told reporters. It will be based in Australia, with the location still to be decided, he said.
Bloomberg - 19-Sep-08
http://www.globalcoal.com/news/coalnews.cfm
thx
MS
noirua
20th-September-2008, 08:10 AM
Hi yeah looks liek a drop in coal prices thsi week
MS
The coal miners who have reserves principally in Aus or NZ
will gain or lose on the basis of how the AU$ and NZ$ do against the US$.
The fall by the AU$ is about 17% after todays wild swings.
The thermal benchmark was set at US$125 for 1st April annual contracts.
Complication arise because China added a tax on coal exports from thermal up to coke. Also export restrictions remain in force for the time being.
India is reported to be about 100 million tonnes short of power station coal going forward.
There is extra capacity now in QLD which may put pressure on prices up there.
Restrictions at Newcastle will probably remain in force until the second quarter of 2010.
So, all in all, there is very little likelihood of thermal coal prices falling that much further before a recovery ensues.
noirua
23rd-September-2008, 03:34 AM
Bloomberg reports today that the price of thermal coal out of the Newcastle Port for 19th Sep 08 was US$137.30 a tonne, down US$14.35 from last week.
Demand for coal is expected to weaken inline with oil as coal is reported to be building up at China's Ports for export.
Coal shipped at Newcastle was up 38% last week with waiting time pushed down to 8.89 days.
Australia's coal exports are expected to rise 4.2% in 2009 to 192.4 million tonnes.
agro
2nd-October-2008, 12:09 PM
how come all the coal stocks (FLX, MCC, CEY) are getting absolutely smashed of late? is it to do with the garneout report?
noirua
6th-October-2008, 10:06 AM
how come all the coal stocks (FLX, MCC, CEY) are getting absolutely smashed of late? is it to do with the garneout report?
If economies decline rapidly then less coal will be needed just at the time as coal being mined expands.
There will still be good demand for power station coal, quality thermal, but demand for other coal may well drop.
Aussie coal companies need the Aussie$ to decline further and this will be a great help.
Fortunately the Newcastle Port expansion will not be ready until 2010 and prices should hold up well, when AU$ prices are taken into account for coal exported.
FLX, CEY, MCC and GCL have fallen badly. Felix are doing better due to the bid situation and have sold 49% of the Minerva Mine and 45% of Ashton, and have a good sales position in place. The Moolarben open-cut mine has most of the 4mtpa production, from 2010, sold in advance in a 25-year-deal with the 20% holders in the project.
I have a holding in all four mines, above mentioned, and Felix look the strongest in the present situation with the best dividend prospects.
noirua
13th-October-2008, 08:46 PM
Thermal coal prices out of the Newcastle Port fell to US$111.90 a tonne for weekending 10th October 2008. Waiting time reduced to 8.6 days from 9.3 days the week before. Waiting at Gladstone Port, QLD, was zero.
roland
13th-October-2008, 09:41 PM
Thermal coal prices out of the Newcastle Port fell to US$111.90 a tonne for weekending 10th October 2008. Waiting time reduced to 8.6 days from 9.3 days the week before. Waiting at Gladstone Port, QLD, was zero.
I wonder if someone has factored in the huge drop in the Aussie dollar, has it offeset the fall in Coal prices enough to negate the price decline?
FMG made a big song and dance about the exchange rate windfall today, I'd expect, unless MCC and others are hedged, they should be doing a lot better right now....
noirua
14th-October-2008, 09:30 AM
I wonder if someone has factored in the huge drop in the Aussie dollar, has it offeset the fall in Coal prices enough to negate the price decline?
FMG made a big song and dance about the exchange rate windfall today, I'd expect, unless MCC and others are hedged, they should be doing a lot better right now....
Most companies are hedged about 20% to 35%, in the coal miner industry.
Peak for thermal was US$194 per tonne, spot price out of Newcastle Port, when the Aussie was AU$1.05 to the US$1: = AU$203 per tonne.
Present thermal spot price is US$111 per tonne, Aussie now at AU$1.427 to the US$1: = AU$158 per tonne.
Reealjrd
18th-October-2008, 04:42 PM
I think trading in coal stocks will not harm your investment. But i will only suggest to do intraday trading.
noirua
21st-October-2008, 07:35 AM
Spot thermal coal prices out of the Newcastle dock fell a further 6.4% last week to US$104.70 per tonne. Ships at anchor rose to 25 and demurrage stood at 8.8 days.
Reealjrd
22nd-October-2008, 10:46 PM
This week there we can see some weakness in coal and oil prices. AS don't have any open positions and go for intra day trades and try to book profits.
noirua
23rd-October-2008, 10:34 AM
It is expected that BHP Billiton would have to divest some of its iron ore and coal assets to fully satisfy authorities over its bid for RIO.
michael_selway
25th-October-2008, 01:36 AM
Spot thermal coal prices out of the Newcastle dock fell a further 6.4% last week to US$104.70 per tonne. Ships at anchor rose to 25 and demurrage stood at 8.8 days.
Hi its closed to USD$96.00 this week!
thx
MS
Hi m_s, thanks for that, you're sharp with the info.
Although I'm still well invested in coal stocks and still buying (pure Aussie coal stocks), I do accept that coal prices will plunge - in fact doing so.
Hopefully the plunging Aussie will allow thermal coal to go down to US$70 to US$90 per tonne without that much of a problem for the companies. As thermal coal is mostly used for power stations.
Very concerned about PCI coal, semi-soft, semi-hard and hard coking coal. As steel companies are wobbling already and many may crash or just not be able to afford coal anywhere near the present contract agreed prices. If these coals fell 50% to 60%, in US$'s, then I would not be surprised.
noirua
3rd-November-2008, 08:35 PM
The slight strengthening in coal prices in Asia this week has given a boost to coal companies Macarthur Coal, Gloucester Coal, Centennial and Felix Resources.
A continued bounce is now expected for thermal coal out of the Newcastle Port after the 40% fall.
nulla nulla
3rd-November-2008, 10:11 PM
Recent announcent from CEY was fairly upbeat. Succinctly they produce coal for powerstations which is much in demand globaly, particularly India & China where the power stations do not appear to have significant reserves of coal. Countries can play brinkmanship games with their iron ore suppliers (and the coal suppliers for smelting) but they get into hot water when they play silly buggers with their domestic power supply. The fall in the Australian dollar works in favour of Autralian coal suppliers to power stations where the sales are in US$. Any slowing in demand is offset by the gain on currency conversion.
noirua
7th-November-2008, 04:26 AM
Following Citigroup's forecast for thermal coal in April 2009 at US$100 per tonne. The market now foresees much lower prices for coking coal and PCI coal, as steel makers cut back sharply.
noirua
7th-November-2008, 11:07 AM
Following Citigroup's forecast for thermal coal in April 2009 at US$100 per tonne. The market now foresees much lower prices for coking coal and PCI coal, as steel makers cut back sharply.
General views show increasing concern about coal sales to the steel industry. With this in mind, some companies may sell PCI coal into the thermal coal market as higher grade thermal.
Companies in South Korea and Japan that have joint ventures with Australian coal miners, are likely to be pressed to take extra coal from them and discontinue taking supplies from others.
noirua
9th-November-2008, 10:49 AM
Thermal coal continued its recovery at Newcastle, Europe and in the States on 7th Nov 08. Up $3.19 to US$104.02, up $4.75 to US$105.65 and up $6.10 at US$104.50 a tonne.
NSW slips into deficit, cuts $3.3b
Mini-budget fails the test
November 11, 2008 - 2:33PM
NSW will raise coal royalties from next year as it looks to shore up its sagging finances.
The state government, in releasing new budget measures on Tuesday, also said it would no longer allow coal-miners to deduct transport costs from the royalty calculation.
From January 1, royalties will rise to 8.2% for open cut mining, from 7% now; to 7.2% for underground mining, from 6%; and to 6.2% for deep underground mining, from 5%.
The NSW government released the new measures after an economic slowdown and big drop in tax receipts forced it to revise its budget for the year to June 2009.
It also said it would sell state assets, including the NSW lottery and a waste-services business, WSN Environmental Solutions, though it gave few details.
NSW accounts for about 10% of Australia's $1 trillion economy and is now planning for a deficit of $917 million for 2008/09 from a previously forecast surplus.
Reuters
noirua
12th-November-2008, 11:38 AM
Hi roland, thanks for the article. Looks as if coal miners are going to need the Aussie$ quite a bit lower, against the US$, if prices tank with the oil price.
noirua
14th-November-2008, 08:41 PM
Hi roland, thanks for the article. Looks as if coal miners are going to need the Aussie$ quite a bit lower, against the US$, if prices tank with the oil price.
From the GlobalCoal reports it seems that markets are looking set for lower prices in the power-station coal market, as India is reported to be searching for coal bargains.
Some companies in Australia have prices set from January 1st 2009 and prices agreed will be interesting.
noirua
15th-November-2008, 04:15 AM
Power-station thermal coal out of the Port of Newcastle fell $6.50 to US$97.52 a tonne, as of Friday 14th November. Well below the benchmark price set on 1st April of US$125 per tonne.
Europe, out of Amsterdam, fell $9.85 to US$94.65 and US prices tanked $11.15 to US$94.50 a tonne.
Exchange rate was AU$0.93 to US$1 on 1st April 08 = (US$125 per tonne) AU$134 per tonne.
Exchange rate was AU$0.65 to US$1 on 14th Nov 08 = (US$97.52 per tonne) AU$150 per tonne.
noirua
18th-November-2008, 10:57 AM
Coal and iron ore suppliers are having to take great care to make sure that a letter of credit is in place before shipping.
noirua
19th-November-2008, 10:29 PM
Coal and iron ore suppliers are having to take great care to make sure that a letter of credit is in place before shipping.
Coal stocks, and I refer to those mining purely in Australia and selling in or shipping out.
About 3 months ago it was purely a case of getting the coal out of the ground and trying to ship it out for top dollar.
Now, it's making sure who you send it to is able to pay up or honour prices agreed to 31st March 2009.
So, it's a case of looking at whether a company will be able to sell its coal and the quality of the company, and indeed, the country it's being sent to.
Iron ore prices have tanked seriously badly and coking coal and PCI coal may dive in price the same way. Even the weak Aussie will not be enough.
Thermal coal will be affected less but PCI coal could be sold by some as thermal. Thus squeezing companies with only thermal coal that is not of good quality, benchmark or better.
On prices, there are guesses all over the place for 2009. Worst case so far is for thermal at US$70 per tonne against US$125 in 2008. So, with the Aussie around AU$1.50 to the US$1 the fall is not that bad.
Semi-soft coke at around US$240 per tonne looks the most vulnerable, and what of semi-hard and hard coking?
Some coal companies have crashed badly and rightly so. Amongst them are more solid companies with clients having a stake in their mines with long term agreements to purchase coal at market prices. These are safer and now look cheap.
noirua
20th-November-2008, 11:34 AM
A handful of coal producers remain at very low levels despite good yields, low PE's and earning yields. Each have their problems and good points, one debt, three development of mines, and one a possible problem coal mix. Despite this I have taken the risk and added more stock, not a lot, but just a bit more.
Well, my own views on coal prices is more negative on thermal coal than Macquarie Bank, but maybe their estimate is better than my guesses. They forecast a thermal coal fix for April 09 at US$100 (earlier forecast US$170) per tonne against US$125 at present. Their forecast is for coking coal at US$140 (earlier forecast US$350 per tonne) per tonne against US$300, quite a fall.
Factoring in the Aussie Dollar fall helps a lot.
noirua
22nd-November-2008, 05:39 AM
Thermal coal out of the Newcastle Port (spot for delivery in 3 months) fell heavily to end the week at US$85.69 per tonne, down $10.83.
Thermal out of Europe was at US$85.78 per tonne, down $8.87 and the States at US$79.60 per tonne, down $14.90.
noirua
22nd-November-2008, 08:53 AM
A handful of coal producers remain at very low levels despite good yields, low PE's and earning yields. Each have their problems and good points, one debt, three development of mines, and one a possible problem coal mix. Despite this I have taken the risk and added more stock, not a lot, but just a bit more.
Well, my own views on coal prices is more negative on thermal coal than Macquarie Bank, but maybe their estimate is better than my guesses. They forecast a thermal coal fix for April 09 at US$100 (earlier forecast US$170) per tonne against US$125 at present. Their forecast is for coking coal at US$140 (earlier forecast US$350 per tonne) per tonne against US$300, quite a fall.
Factoring in the Aussie Dollar fall helps a lot.
I still think Macquarie is over optimistic on thermal coal, but who knows they could be right. Finished buying coal stocks on Friday having reached my limit. Will sit it out now.
Is the coal sector cheap or is it expensive?
noirua
29th-November-2008, 01:05 AM
I still think Macquarie is over optimistic on thermal coal, but who knows they could be right. Finished buying coal stocks on Friday having reached my limit. Will sit it out now.
Is the coal sector cheap or is it expensive?
So far Maquarie are once again behind events in their forecasts on thermal coal prices.
Newcastle Port thermal coal fell to US$78.19 a tonne, down a further US$7.50.
Thermal coal price fix on 1st April 2008 was US$125 per tonne and high was US$194 per tonne.
Some guesses see thermal coal fix in 2009 at US$70 per tonne and semi-soft coke down from US$240 per tonne to US$110 per tonne.
The tanking Aussie Dollar will help but an exchange rate of AU$1.70 to US$1.00 is needed if coal prices continue down.
noirua
2nd-December-2008, 05:31 AM
Having tracked a number of coal vessels due to ETA in December at the Gladstone Port. I notice many suddenly disappear from the shipping list, indicating either cancellations or clients requesting later deliveries.
Spot prices continue to tank inline with the oil price tumble, Brent crude at US$48 a barrel to day, and no sign yet of a bottom in thermal coal prices.
Biggest worry is PCI coal where Macarthur Coal indicated they were prepared to sell this as quality thermal. Semi-soft coke is mainly on 12 month deliveries and is expected to tank badly.
Not forgetting the Aussie fall from AU$1.05 to AU$1.56 to the US$1 that will help a great deal next year, when companies present currency deals end.
noirua
2nd-December-2008, 10:07 AM
So far Maquarie are once again behind events in their forecasts on thermal coal prices.
Newcastle Port thermal coal fell to US$78.19 a tonne, down a further US$7.50.
Thermal coal price fix on 1st April 2008 was US$125 per tonne and high was US$194 per tonne.
Some guesses see thermal coal fix in 2009 at US$70 per tonne and semi-soft coke down from US$240 per tonne to US$110 per tonne.
The tanking Aussie Dollar will help but an exchange rate of AU$1.70 to US$1.00 is needed if coal prices continue down.
NBSP US coal price for spot thermal, 3 months delivery, was at US$78.10 per tonne, down US$1.50 on 29/11/08.
ARA - Europe coal price for spot thermal, 3 months delivery, fell sharply to US$70.50 per tonne, down $15.28 on 20/11/08.
noirua
2nd-December-2008, 10:08 AM
So far Maquarie are once again behind events in their forecasts on thermal coal prices.
Newcastle Port thermal coal fell to US$78.19 a tonne, down a further US$7.50.
Thermal coal price fix on 1st April 2008 was US$125 per tonne and high was US$194 per tonne.
Some guesses see thermal coal fix in 2009 at US$70 per tonne and semi-soft coke down from US$240 per tonne to US$110 per tonne.
The tanking Aussie Dollar will help but an exchange rate of AU$1.70 to US$1.00 is needed if coal prices continue down.
NBSP US coal price for spot thermal, 3 months delivery, was at US$78.10 per tonne, down US$1.50 on 29/11/08.
ARA - Europe coal price for spot thermal, 3 months delivery, fell sharply to US$70.50 per tonne, down $15.28 on 29/11/08.
noirua
3rd-December-2008, 01:02 AM
Some probably think coalminers are at a rock and a coalface at the moment. Probably due to the sudden turn-a-round and having to get bank letters to be certain clients can pay or being put in the dilemma of accepting delays.
Companies need to have loads of cash and be careful about costs on development and exploration. Must be a producer with good clients preferably with stakes in the mines.
Coal is dropping in price like a stone and thermal may drop 50% (US$62.50 per tonne), with PCI down 55% (US$81) and semi-soft coke coming down 60% (US$96), imho.
AU$1.05 fall to AU$1.56 to the US$1.00 helps to some extent.
drillinto
6th-December-2008, 08:22 PM
December 05, 2008
Australian Analysts Accept The Bear Fact That The Coal Price Is Coming Down
By Richard Roberts of Highgrade.net
Source: www.minesite.com
A couple of weeks ago veteran Australian coal analyst Dr Don Barnett nearly choked on his cornflakes when he saw Macquarie Bank had chopped its coking coal price forecast for 2009 by close to 60 per cent. With Merrill Lynch having now added its name to the doomsayers list, Dr Barnett now concedes his reaction to the Macquarie “overreaction” may have been a bit hasty: the managing director of Sydney-based Minec said at a mining conference in the harbour city around a fortnight ago that Macquarie’s expectation that the US$365 per tonne contract price for hard coking coal won by US producers a few months ago would plummet to US$140 per tonne in 2009 was over the top.
“Not everybody expects substantial discounts,” he said at the time. “I’m certainly not forecasting $US140 per tonne coking coal. I’m taking a punt on ... between $US250 to US$280 per tonne ... it doesn’t really matter if the Australian dollar stays around where it is now, it’s a hell of a lot of money. They’re record prices in Australian dollar terms.”
But Merrill Lynch analyst Vicky Binns said in a research note released last week that steel mill closures and production cuts in Asia and elsewhere were causing metallurgical coal demand to “disintegrate”, and she flagged a reduction of up to 58 per cent in contract hard coking coal prices next year. Semi-hard coking coal prices could drop by 52 per cent to around US$115 per tonne. “Cumulative crude steel production cuts in 2008Q4 sum to 44 million tonnes, 33 million tonnes alone from blast furnace closures,” Binns said. “Annualising 2008Q4 steel output, year-on-year steel production in 2009 would be down 10-15 per cent versus 2008. According to IISI (World Steel Association), October’s global steel output alone was [down] 12.4% year-on-year, with every region declining: US & China down 17 per cent; CIS down 33 per cent. If we annualise forecast Dec-08 crude steel production, 2009 output is down 20 per cent year-on-year. This is NOT our base case for 2009. However, it does appear likely global steel production will be at least five per cent lower vs 2008. Our forecast China’s crude steel production in 2008 is 490 million tones, (flat year-on-year) and 470 milliont tones in 2009.”
Binns said the bad news on steel output could keep coming. “Look for more announcements relating to steel capacity closures in 2009Q1,” she said. “Over the last three weeks, there have been dramatic changes in the demand outlook for met coal. Coke prices collapsing by 50% for both China’s and export supply; customers have sought to delay or defer shipments of even premium hard coking coal; several Indian mills even hoped to re-negotiate FY09 prices for outstanding tonnage - very unlikely, in our view; or some mills simply not sending ships or answering calls. We expect an extension of a substantial percentage of 2008Q4 global steel cuts into 2009Q1, and therefore we look to much greater demand destruction for met coal than has been evident to date. “While we believe it is too early to accurately forecast coking coal prices, given the enormous volatility in steel production rates (settlement could be as late as May-09), it is clear the negative news is vastly out-weighing positive. Not only is demand growth being hit by the collapse in steel production, but coal export flows remain strong (particularly from Australia, the US). The seaborne supply-demand balance, even for hard coking coal, appears to be moving into surplus.”
And so Dr Barnett told HighGrade the rapid changes in the market had certainly altered his take on proceedings, although predictions of a 50-60 per cent price cut for hard coking coal in 2009 still looked overdone. “I think it’s still probably a bit of an overreaction, but I’d be less adamant than I was a couple of weeks ago ... because the information just gets gloomier as we go on,” he said. “It’s a difficult thing to argue at the moment because there is a hell of a gap between the current prices, or even US$140 per tonne, and the cost of [most] supply. There’s still a substantial cushion at a low US dollar exchange rate for the Australian producers. So it’s not like the traditional case where you said, well there’s the 90th percentile of supply [cost] and that’s where the price will be. These prices are still above that ... at a A65-70c/US dollar exchange rate.”
Binns said Australia supplied about 55% of the world’s seaborne met coal. “This lower Australian dollar does impact the cost of production,” she said. “We estimate the average cost of met coal production from Australia to port is about A$70 to A$75 per tonne, which at spot A$/U$ 0.65 is US$45-50 per tonne. A price of US$125 per tonne for hard coking coal would return a cash margin for those average producers of about 55-60 per cent. We estimate cash production costs have continued to rise over the last few years and we believe the average cost of Canadian production FOB is about US$100 per tonne, and for US production [more than] US$110 per tonne FOB US east coast. US exports are up 37 per cent in 2008, as those producers ‘make hay while the sun shines’ with higher prices. We expect some cuts in production from US producers if prices correct to our forecast levels. We find it difficult to believe that there would be any substantial cuts to Australian met coal production in the near-term. We believe it is more likely that any production and export cuts will come from the higher cost US and Canadian producers.”
However, “deferred shipments are now a reality” for Australia’s coal producers, Binns said, mirroring the situation on the country’s west coast with iron ore. According to Barnett, Queensland’s new “super coal royalty” added to the cost pressures on the state’s coking coal exporters. “If you go back to the US$300 per tonne level, the Queensland royalty is a very significant cost item,” he said. “At say A80c [to the US dollar] – roughly the average for 2008 – it’s a big swag of money ... a bit over A$30 per tonne for the hard coking coal people. So when you come down to a lower price you do get a drop-off in that royalty of A$15 to A$19 per tonne. But the cost element has been increasing. If you come down to US$125 per tonne and the Australian dollar is in the higher 60s [USc], there’s not a lot of cushion then between the higher cost mines and the Australian dollar price. So it is starting to get a bit tight.” And his thoughts now on the contract hard coking coal prices next year? “I still think we’ll be on the upside of US$140 per tonne, but perhaps not substantially on the upside,” Barnett said, after a long deliberation.
[This article is a slightly modified version of the original, which appeared on Highgrade.net on 1st December]
noirua
7th-December-2008, 01:26 AM
Thermal benchmark coal out of Newcastle for 5th Dec, spot for 3 months delivery, fell $2.10 to US$76.09 per tonne.
US fell $2.90 to US$75.20; and Europe to US$76.50 up $6.00. Some European dumping of thermal caused the set back last week.
noirua
7th-December-2008, 01:27 AM
Thermal benchmark coal out of Newcastle for 5th Dec, spot for 3 months delivery, fell $2.10 to US$76.09 per tonne.
US fell $2.90 to US$75.20; and Europe to US$76.50 up $6.00. Some European dumping of thermal caused the setback last week.
noirua
10th-December-2008, 11:06 AM
Merril Lynch have upgraded Felix Resources to outperform, downgraded Centennial Coal to neutral, Macarthur Coal to underperform and Gloucester Coal to underperform.
noirua
13th-December-2008, 10:38 AM
Thermal benchmark coal out of Newcastle for 5th Dec, spot for 3 months delivery, fell $2.10 to US$76.09 per tonne.
US fell $2.90 to US$75.20; and Europe to US$76.50 up $6.00. Some European dumping of thermal caused the setback last week.
Slightly better this week, at least the downward trend has stopped, for a moment anyway.
Newcastle thermal rose a tad, just US$2.10 at US$78.25 per tonne. US fell away US$1.02 at US$74.18 per tonne and Europe managed a 61c hop to US$77.11 a tonne.
pacestick
14th-December-2008, 07:16 AM
isnt the small rise related to the small rise in the week of oil and therefore as a trend is pretty conditional on what happens with opec and russia trying to shore up the oil price this week
noirua
20th-December-2008, 09:17 AM
Slightly better this week, at least the downward trend has stopped, for a moment anyway.
Newcastle thermal rose a tad, just US$2.10 at US$78.25 per tonne. US fell away US$1.02 at US$74.18 per tonne and Europe managed a 61c hop to US$77.11 a tonne.
Another week and thermal coal prices continue their uncertain path despite Xstrata tieing up an US$80 per tonne agreement for thermal coal out of Australia for 2009.
Thermal coal prices, spot, out of Newcastle for 3 months delivery, fell 44 cents to US$77.81 a tonne.
In Europe, down 11 cents to US$77.00 a tonne and the States, up $6.15 at US$80.33 - the latter somewhat bucking the trend.
noirua
20th-December-2008, 09:55 AM
Vessels loading coal at the Newcastle port are experiencing increased demurrage. Vessels waiting have risen to 45 and 4 in port. Average waiting time is 14.03 days and comes as a disappointment after comments on improvements have been made.
noirua
28th-December-2008, 03:51 AM
Another week and thermal coal prices continue their uncertain path despite Xstrata tieing up an US$80 per tonne agreement for thermal coal out of Australia for 2009.
Thermal coal prices, spot, out of Newcastle for 3 months delivery, fell 44 cents to US$77.81 a tonne.
In Europe, down 11 cents to US$77.00 a tonne and the States, up $6.15 at US$80.33 - the latter somewhat bucking the trend.
Coal prices have improved a little to end the year. Thermal out of Newcastle on 26th Dec 08 rose $2.76 to US$80.56 per tonne.
Europe recovered from dumping, to be up $5.50 at US$82.50 a tonne.
The US rose 67c to US$81.00 a tonne.
kransky
28th-December-2008, 02:35 PM
can you please point me to where those prices are tracked or documented on the web? i'd like to track it myself too if possible
thanks
michael_selway
28th-December-2008, 10:25 PM
can you please point me to where those prices are tracked or documented on the web? i'd like to track it myself too if possible
Interesting this coal sector in 2009 that may lead to a few successes at one end and a few failures at the other.
The Aussie$ is a key factor here. If it stays well down then new currency agreements from April 2009 will see thermal producers do quite well.
Worth checking, sometimes difficult, just how much it costs to produce the coal per tonne.
If the mine produces coking coal only and is a high cost underground mine, with heavy rail and shipping costs, then the decline will be quite marked.
Some may be developing mines that are costing AU$100 to AU$400 million, whilst profits drop from their producing mines.
Do your own research they say, in this sector it is critical.
noirua
3rd-January-2009, 10:47 AM
Coal prices have improved a little to end the year. Thermal out of Newcastle on 26th Dec 08 rose $2.76 to US$80.56 per tonne.
Europe recovered from dumping, to be up $5.50 at US$82.50 a tonne.
The US rose 67c to US$81.00 a tonne.
Thermal coal out of Newcastle for 2nd Jan 09, spot, 3 months delivery, fell $1.37 to US$79.19 per tonne. US fell 6c to US$80.94 a tonne and Europe rose $1.16 to US$84.16 a tonne.
pacestick
3rd-January-2009, 01:15 PM
This seems to be an unusual slowdown in the world economy back in the recession we had to have Wrans navy i.e. the ships anchored off newcastle disappeared . I live in Newcastle and i can see a lot anchored along the coast line waiting to get into port to load .Newcastle Port reports that in the week to 29 December they loaded 25 ships and the waiting time was an average of 13.5 days As of the 29 December there were 45 vessels waiting to load a total of 3,835,996 tonnes of coal
Rockon2
3rd-January-2009, 01:33 PM
Yeah time tobring outteh list again :) Btw any new coal stocks i missed below?
Xstrata latest contract locks in coal price plunge
Matt Chambers | December 19, 2008
Article from: The Australian
THE nation's thermal coal exporters could face a 50 per cent drop in contract prices next year.
This would represent a $9 billion hit to exports, after Swiss mining giant Xstrata rushed to accept a big contract price drop.
Xstrata, the world's biggest thermal coal exporter, is understood to have locked in $US80 ($114) a tonne contracts with Japanese power companies for the next calendar year -- just half the price it received only three months ago.
The early agreement comes after Xstrata and Macarthur Coal this week started a round of production cutbacks and worker layoffs in Queensland's previously insulated coking coal industry.
With oil prices continuing to look shaky, analysts said Xstrata's thermal coal deal did not bode well for other local producers, such as Rio Tinto and Centennial Coal, who will be looking to negotiate contracts for the Japanese financial year, which starts in April.
It also makes analyst consensus of $US90 a tonne for the full year look too high, though many have been lowering forecasts in recent weeks.
"Time is against the suppliers in this market -- it is not surprising we are seeing them want to lock in prices quickly," said Mark Pervan, director of commodities research at ANZ in Melbourne.
Thermal coal contracts were settled at a record $US125 a tonne for this Japanese financial year, and Xstrata in September locked in a 12-month contract at $US155.
Unlike iron ore and coking coal, which are both used in steelmaking, thermal coal is not strictly contracted on a Japanese financial year basis and contracts can start at different times.
Prices of thermal coal, used to make electricity, had surged on the back of soaring global energy prices and are now expected to slide as oil prices plunge.
Customers are still expected to take delivery, and there has been no talk of production cuts. Government forecaster ABARE is predicting coking coal exports of $18 billion this financial year.
The worsening outlook for coking coal exports was reinforced last night by South Korea's POSCO, the world's fourth largest steelmaker, which announced its first-ever production cut to reduce rising inventory caused by a sharp fall in local demand. POSCO, which produces 2.78 million tonnes of crude steel a month, said it would reduce output by 200,000 tonnes this month 370,000 tonnes next month.
Merrill Lynch, which forecasts a contract price of $US80 a tonne next year, said the Xstrata deal would probably be seen as a benchmark, though the outlook for coal was not strong.
"This is a good deal for Xstrata as the thermal market is exposed to several key bear factors, including a ... weak short to medium term global economic outlook, rising coal production in China and weakness in metallurgical (coking) coal markets," Merrill analyst Vicky Binns said.
The sudden dip in global coking coal markets, with steelmakers this month suddenly calling for deliveries to be deferred, is expected to flow through to thermal coal.
Many coking coal mines have areas of thermal coal available if customers do not want the higher-quality hard coking coal.
Semi-soft coking coal can also be sold as thermal coal. Felix Resources managing director Brian Flannery said his company could start mining thermal coal instead of coking coal if steel mills could not take contracted volumes. He said there were no plans to do so, and there had been no requests for deferrals, but company representatives were in talks with Japanese steel mills about future needs.
ANZ's Mr Pervan forecasts contract prices of $US75 a tonne for the Japanese fiscal year. However, the slide in oil prices could drive this lower, he said.
Goldman Sachs JBWere this week dropped its forecast from $US90 a tonne to $US70.
thx
MS
pacestick
5th-January-2009, 09:17 PM
an. 5 (Bloomberg) -- Power-station coal prices at Australia's Newcastle port, a benchmark for Asia, slipped 1.7 percent last week as the number of ships waiting to load the fuel fell after higher-than-expected shipments in December.
The weekly index for power-station coal prices at the New South Wales port dropped $1.37 to $79.19 a metric ton in the period ended Jan. 2, according to the globalCOAL NEWC Index. The measure has risen from $76.09 a ton on Dec. 5, the lowest in almost 14 months.
Prices have fallen about 60 percent from the $194.79 a ton record reached in the week ended July 4 last year because of declining demand and lower crude-oil prices. Bottlenecks at Australian ports contributed to record prices last year as supplies were constrained to customers in Asia.
The number of ships waiting to load at Newcastle should fall to 19 by mid-January, from 30 at the end of December, the Hunter Valley Coal Chain Logistics Team, which coordinates coal movements to and from Newcastle, said on its Web site. The queue has fallen from 45 earlier in December, which was the most in a year.
The performance rates in December for the assembly of cargoes at Newcastle and their loading onto ships were both above target, the group said.
Xstrata, BHP
Xstrata Plc, the world's largest exporter of power-station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle. Zug, Switzerland- based Xstrata has been forced to accept a cut in prices for annual calendar-year contracts for the fuel with Japanese utilities, Citigroup Inc. and Merrill Lynch & Co. said Dec. 17.
Twenty-five coal ships left Newcastle in the week ended Jan. 3, one less than a week earlier, Newcastle Port Corp. said today in an e-mailed report. Sixteen of the vessels were headed for Japan, two each for South Korea and Taiwan, and one each for Mexico, China, Malaysia, France and Western Australia's Fremantle.
The monthly Newcastle thermal coal price index fell 14 percent to $78.18 ton in December, from $91.36 the previous month, according to globalCOAL. It was the lowest since October 2007. The January Newcastle coal futures contract closed Jan. 2 at $74.35 a ton, down 1.7 percent, on London's ICE Futures Europe exchange.
The volume of coal transported to Newcastle for export rose 8 percent last year to 91.4 million tons, while the volume loaded onto ships advanced 7.5 percent to 92 million tons, the Hunter Valley Coal Chain Logistics Team said in its end- December report.
J.B.Nimble
6th-January-2009, 01:54 AM
Slightly old news (must have been preoccupied on New Years eve...)
Chinese coke producers are earning profits again now that demand has rebounded amid relatively low coking coal prices, a coal analyst told Interfax on Dec. 31.
Ma Xiaoguang, a coal analyst with metal information portal Umetal, estimated that coke producers are earning profits of between RMB 50($7.31) and RMB 100 ($14.62) per ton.
The market price of coking coal, the main raw material in coke production, is sitting at about RMB 1,200 ($175.44) per ton, which is around the same price level of coking coal at the beginning of this year, Ma said.
Coking coal prices peaked at the end of July at RMB 2,200($321.64) per ton. Annual contract prices for coking coal are about the same as current market prices, though contract prices are usually adjusted every quarter.
Meanwhile, coking coal companies are offering discounts of RMB 200($29.24) per ton to some steel mills in southern China that purchase coking coal directly, Ma said.
Coke producers have also benefited from an upsurge in downstream demand as a number of small-sized steel mills resumed production at the beginning of December in response to growing demand for steel.
The situation suggests that coke demand grew in December, which in turn caused coking coal prices to rebound recently, Ma said.
Coke prices in Shanxi Province, China's largest coke producing region, rose to between RMB 1,500 ($219.30) and RMB 1,600 ($233.92) per ton as of Dec. 30, up from RMB 1,100 ($160.82) to RMB 1,300 ($190.06) per ton on Dec. 1, according to Umetal.
I like the suggestion that coking coal prices have started to rebound. The world hasn't stopped after all...:)
noirua
6th-January-2009, 02:37 AM
I like the suggestion that coking coal prices have started to rebound. The world hasn't stopped after all...:)
Part of the struggle, will be whether certain types of coal can or cannot replace others. Semi-soft coke and PCI coal can replace thermal coal and some suppliers may take the opportunity to unload it at thermal prices.
noirua
8th-January-2009, 10:21 PM
Most coal stocks have rebounded, rising up to 100% from their low point. Most are still at a third or less of their 2008 highs.
Profit forecasts for year ending 2009 are set to tumble and again for 2010.
It will be during 2009 that they come out of the melting pot, mostly after June 30th year end trading finishes.
roland
8th-January-2009, 10:27 PM
Most coal stocks have rebounded, rising up to 100% from their low point. Most are still at a third or less of their 2008 highs.
Profit forecasts for year ending 2009 are set to tumble and again for 2010.
It will be during 2009 that they come out of the melting pot, mostly after June 30th year end trading finishes.
Gee I wish that the rebound were true of MCC. Still stuck around the $3.00 mark. There is probably enough intra-day to trade, but I'm still shell shocked with MCC - bottom draw right now. mmmm, my bottom draw is not a pretty site :(
noirua
9th-January-2009, 03:59 AM
Gee I wish that the rebound were true of MCC. Still stuck around the $3.00 mark. There is probably enough intra-day to trade, but I'm still shell shocked with MCC - bottom draw right now. mmmm, my bottom draw is not a pretty site :(
After that major backtrack on profits and dividends at Macarthur, confidence in the board of directors is seriously in doubt. Wouldn't be surprised to see the major holders put the pressure on now, some need tipping.
noirua
19th-January-2009, 05:51 AM
Most Aussie coal companies will give a quarterly report for their second quarter in the next 3 weeks and a half yearly report during February.
The quarterly report will give some clues as to how steep coal sales dropped off.
The other factor will show the extent of companies switching to thermal coal, if they can, and the extent of delays for PCI coal, semi-soft coke and semi-hard to hard coke.
The affect is expected to be dramatic on PCI and coke. But far less so on thermal coal, especially thermal sent in single ships, all from the same mine that is.
michael_selway
19th-January-2009, 09:10 AM
Most Aussie coal companies will give a quarterly report for their second quarter in the next 3 weeks and a half yearly report during February.
The quarterly report will give some clues as to how steep coal sales dropped off.
The other factor will show the extent of companies switching to thermal coal, if they can, and the extent of delays for PCI coal, semi-soft coke and semi-hard to hard coke.
The affect is expected to be dramatic on PCI and coke. But far less so on thermal coal, especially thermal sent in single ships, all from the same mine that is.
Yes it will be good to see some of the results soon, and a few companies may surprise on the upside
Some are sitting with a P/E under 5 that have already re-affirmed their profit guidance ;) You'd expect some reasonable falls in profit over the next year or two, but 50% is a little extreme..
To be honest I don't quite understand why many of the mainly Thermal producers are trading already as if their profits will halve.. many have contracted a lot of their production for 6-24 months at the old prices. This should keep profits at least reasonable, until the worst of this downturn has hopefully passed.
noirua
19th-January-2009, 11:00 AM
Some are sitting with a P/E under 5 that have already re-affirmed their profit guidance ;) You'd expect some reasonable falls in profit over the next year or two, but 50% is a little extreme..
To be honest I don't quite understand why many of the mainly Thermal producers are trading already as if their profits will halve.. many have contracted a lot of their production for 6-24 months at the old prices. This should keep profits at least reasonable, until the worst of this downturn has hopefully passed.
Some of the coal mining stocks include profits from sales of assets in their profits for 2008. In the current year this opportunity is unlikely to be available. A few have quite heavy loan arrangements or commitments to explore or develop further mines.
There are additional concerns, that some mines may have to be mothballed or face a few lower cost open-cut mines coming onstream and pricing them out.
Many mining companies are having to delay shipments on requests or because the buyers bank cannot guarantee payment.
There are many mines where Chinese, South Korean and Japanese companies have stakes. In these cases there are coal agreements to purchase a certain amount of coal each year. These mines are safer than the ones that are 80% to 100% owned (excluding FLX's Moolarben project that has all coal for their open-cut mines sold for 25 years in advance).
noirua
24th-January-2009, 03:23 AM
Benchmark thermal coal prices out of Newcastle Port, spot for 3 months delivery:
22nd January - US$88.36
21st January - US$87.73
20th January - US$85.79
19th January - US$85.98
18th January - US$81.46
noirua
24th-January-2009, 03:37 AM
Benchmark thermal coal prices out of Newcastle Port, spot for 3 months delivery:
23rd January - US$88.19
22nd January - US$88.36
21st January - US$87.73
20th January - US$85.79
19th January - US$85.98
18th January - US$81.46
Macquarie have down graded their Hard coking coal price to US$110 per tonne, down from highs of US$300 per tonne.
Forecast for thermal coal (6080 K/cal) is now US$75 per tonne agains a high of US$194 per tonne and last years Japan new year fix at US$125 per tonne.
J.B.Nimble
25th-January-2009, 12:40 AM
Mixed blessings in this story. Positive is China power industry turning attention to Australian coal, negative is the weak electricity demand.
From today's China Daily...
China's major power generating companies are planning to buy more coal from overseas markets, as high domestic coal prices have cut their profit margins significantly.
The country's main power generators, including China Huaneng Group, China Datang Corp, China Guodian Corp, China Huadian Corp, China Power Investment Corp and China Resources Power Co, are contacting coal producers in other countries. They're planning to hold a conference for coal contracts after the Chinese Lunar New Year, celebrated on Jan 26, reported China Times, citing an executive with one power company.
"We are now talking with coal companies in Australia, Indonesia, Russia and Mongolia to secure stable coal supply," said the executive, who declined to be named.
In the first half of 2008, the sharp rise in domestic coal prices put many power companies into the red.
Xue Jing, director of the statistics department at the China Electricity Council, earlier told China Daily that China's power companies may incur 70 billion yuan losses in 2008 due to rising fuel costs and lackluster electricity demand.
"Although now the coal price has seen a sharp drop compared with last summer, we are still under big pressure," one source with China Huaneng Group told China Daily.
He said in past years Huaneng has imported some coal from foreign companies, but the amount was "not very big".
The company is now considering some investments in overseas coal mines, such as in Australia, he said.
To cope with the rising prices of raw material, Huaneng is eyeing abundant coal reserves in western China to increase its coal production, he said. For instance, the company plans to take part in some coal projects in Shaanxi, Ningxia and Xinjiang.
China's leading power companies have failed to reach an agreement with coal miners on coal supply contracts in 2009 as they are unwilling to concede to the miners' demands for higher prices.
Coal companies were set to sell 840 million tons to power producers at the annual coal contract negotiations. However, only about half of the coal offered by the miners was sold, said an official with China Coal Transport and Distribution Association, who declined to be named.
(China Daily 01/24/2009 page10)
noirua
27th-January-2009, 10:29 PM
Benchmark thermal coal out of the Newcastle Port fell on Monday to US$83.88 a tonne, down $4.33 since Friday.
Coal negotiations for the year starting 1st April 09 may be proving difficult and parties may fall inline with a 3 monthly agreement, similar to iron ore price discussions.
michael_selway
28th-January-2009, 07:27 PM
Benchmark thermal coal out of the Newcastle Port fell on Monday to US$83.88 a tonne, down $4.33 since Friday.
Coal negotiations for the year starting 1st April 09 may be proving difficult and parties may fall inline with a 3 monthly agreement, similar to iron ore price discussions.
It will be interesting to see what happens from here
The outlook for Japan and China does now look quite serious. Many coal companies will get by just because of the tanking Aussie$ and hope it gets lower and lower.
Too many seem to be banking on a pickup in the second half of 2009 in the metallurgical coal market and getting by selling more thermal coal.
What if there is little improvement and signs of dumping coal by desperate companies?
Only those with good cash reserves and low cost open-cut mines are likely to do well if markets fail to improve.
noirua
2nd-February-2009, 09:39 AM
Start Date End Date
ICE globalCOAL Newcastle Index
open methodology
globalCOAL Newcastle Index
The week-to-date and month-to-date index values are calculated by globalCOAL on each globalCOAL business day, full details on the methodology are available here.
close
ICE globalCOAL Newcastle Index
Date Week-To-Date Price Month-To-Date Price
January 26, 2009 83.88 82.83
January 27, 2009 83.63 82.78
January 28, 2009 83.25 82.71
January 29, 2009 82.94 82.64
January 30, 2009 83.15 82.69
The globalCOAL Newcastle Index values are calculated and supplied daily by globalCOAL. The Indices are a representation of week to date or month to date prices, calculated from the globalCOAL Newcastle Index traded on globalCoal, and are not calculated from futures activity traded on ICE.
