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Coal - where to now?

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noirua said:
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.
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Hi yeah looks liek a drop in coal prices thsi week

18_9_2008_weekly.gif


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
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http://www.globalcoal.com/news/coalnews.cfm

thx

MS
 
michael_selway said:
Hi yeah looks liek a drop in coal prices thsi week

18_9_2008_weekly.gif




http://www.globalcoal.com/news/coalnews.cfm

thx

MS
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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.
 
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.
 
how come all the coal stocks (FLX, MCC, CEY) are getting absolutely smashed of late? is it to do with the garneout report?
 
agro said:
how come all the coal stocks (FLX, MCC, CEY) are getting absolutely smashed of late? is it to do with the garneout report?
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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.
 
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.
 
noirua said:
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.
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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....
 
roland said:
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....
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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.
 
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.
 
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.
 
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 said:
Hi its closed to USD$96.00 this week!
thx
MS
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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.
 
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.
 
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.
 
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 said:
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.
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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.
 
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 raises coal royalties


http://business.smh.com.au/business/nsw-raises-coal-royalties-20081111-5m9q.html


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
 
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