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Coal - where to now?

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What's the outlook for thermal coal? Based on the link posted above, the price is on a downhill / correction pattern? If I google thermal coal, it's saying the demand is strong. It's just confusing. :eek:

Anyone here in ASF still bullish on coal?
 
sidious said:
What's the outlook for thermal coal? Based on the link posted above, the price is on a downhill / correction pattern? If I google thermal coal, it's saying the demand is strong. It's just confusing. :eek:

Anyone here in ASF still bullish on coal?
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Well if you look atthe above futures, long term looks on the up

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However cant see if it can reach the peak we had in Jul08

thx

MS
 
Due to Chinese demand for metallurgical coal the build up of ships waiting outside the Newcastle Port has risen to 47 waiting to load 3.8 million tonnes, the highest since 24/12/2007. The waiting time average is 11.7 days.
 
A lot of nervousness around in both the coal and iron ore sector. The RIO execs held for alleged spying has provoked a rift in Aussie/ China relations. This could well lead to a tit for tat round of politics affecting shipping to China.
 
New Warning of NSW mine closures under emission reduction laws.

The new report - Brisbane Energy Publishers - suggests that 11 coal mines in NSW could be forced to close in the face of Federal Government climate changes response legislation.

The report tabled in the NSW Parliament says Camberra's planned carbon emissions reduction laws will threaten high-gas-content coalmines in the Southern coalfields and in the Hunter Valley - as well as the Port Kembla Steelworks.
 
Hi noirua, I've read the newspaper reports referring to that article. If there is one thing the ALP likes more than 'touchy feely' environmental policies it is getting reelected. Pt Kembla,Wollongong and the Hunter ALP heartland. I really hope that NSW industry is not crippled and thousands thrown out of work by the maybe's of human impact on climate change. I am 'pro environment' so lets do some real things like not tipping our sewage in the ocean in a country that is mainly desert and lets reaforrestate marginal farmland. I'm sure China wont be shutting its steelworks or any of its mines. I've also read recently where Spain lost 2 'old energy' jobs for every one created by green energy. Coal-where to now? Bloomberg this morning is reporting BHP looking for partners for further coal port expansion in Newcastle. A bit of a jumbled post, apologies, I tend to treat the newspaper reports mentioned above as putting out a feeler:2twocents
 
pointr said:
Hi noirua, I've read the newspaper reports referring to that article. If there is one thing the ALP likes more than 'touchy feely' environmental policies it is getting reelected. Pt Kembla,Wollongong and the Hunter ALP heartland. I really hope that NSW industry is not crippled and thousands thrown out of work by the maybe's of human impact on climate change. I am 'pro environment' so lets do some real things like not tipping our sewage in the ocean in a country that is mainly desert and lets reaforrestate marginal farmland. I'm sure China wont be shutting its steelworks or any of its mines. I've also read recently where Spain lost 2 'old energy' jobs for every one created by green energy. Coal-where to now? Bloomberg this morning is reporting BHP looking for partners for further coal port expansion in Newcastle. A bit of a jumbled post, apologies, I tend to treat the newspaper reports mentioned above as putting out a feeler:2twocents
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Hi pointr et al, That "...putting out a feeler" point quite often comes from Govt as well. Sometimes they are not sure what they can easily do and know MDs and CEOs of companies are going to kick up one hell of a fuss to find out what mines are on this ideas list for closure.

The QLD Govt and NSW Govt know there are a lot of better coal mines out there and getting rid of the bad ones wont concern them much. The Govt deals on the new coal mines are far better for them than many of the old ones.

With the further expansion of the Newcastle Port on the cards it looks as if the Anglo/Swiss Xstrata will want a chunk of that. Some of the smaller miners in the first expansion, WHC, MCC, GCL, CEY and FLX may well drop out after their involvement in the first expansion.
 
My own feelings are now very bullish for the coal sector - a lot of research needed with talk of some high gas producing coal at certain mines putting their whole mine on the line.

If talk of continuing demand from China and Asia for thermal coal and particularly semi-soft coke and maybe good quality PCI coal as well. We can look for a rerating for the better companies in the sector.
Watch out however for those companies having takeover rumours or hangovers surrounding them. Gloucester Coal, Whitehaven and Felix Resources for instance. That doesn't mean you should wholly avoid them though.
 
The queue of ships outside the Newcastle port has risen to 48, whilst coal shipped fell 5%. Waiting to load 3.9 million tonnes of coal, up from 2.05 million a week ago. Ships are now having to wait 14.2 days, up 1.5 days from a week ago.
 
The chinese are reopening mines closed due to accidents.
17 August 2009

AUSTRALIAN coal miners are nervous that the recommencement of mining in Shanxi, China will stifle demand for Australian coking and thermal coal.

On 14 August 2009, news hit that idle mines in the province would be re-opened and were expected to produce an extra 150 million tonnes in the second half.

Many of the mines were closed due to a spate of mining accidents. This meant Chinese imports of coking coal, mostly from Australia, surged to about 4.6 million tonnes in June 2009, up about 50% from May 2009.

But now Australian coal miners are nervous that exports will plummet once again, knowing that China, the world's biggest coal producer, is capable of swamping the market.
ANZ head of commodities research Mark Pervan says that second-half coking coal demand from China is being underestimated by the market. Pervan believes the stimulus package will produce strong demand.

meanwhile Industry sources are concerned that the proposed takeover of FELIX will lead to further chinese purchases and influence in the industry some are picking cey as the next candidate
18 August 2009 Print this article Comments Share this article

INDUSTRY angst surrounding the takeover of Australian resources by Chinese Government-owned businesses continues to grow following the takeover of Felix Resources.

The coal mining company has recently been taken over by Yanzhou.
Analysts are suggesting that if the takeover is approved, it could be the first of many similar acquisitions by China.

There is also concern that this could force the disappearance of Australia's independent coal producers and put the Chinese in a position to start influencing coal pricing.
news inserts sourced from www. miningcoal.com.au
 
Thermal coal out of the Newcastle port plunged to US$67.63 a tonne on Tuesday. This following the reopening of mines in China. This overhang and talk of China unloading thermal coal on to markets looks to be a bearish factor to weigh down on to the coal sector.
Should the thermal coal price fall below US$60 a tonne, many deeper and far off mines will be rendered unprofitable.
Sector looks fraught with difficulties in the coming months.
 
Thermal coal prices out of the Newcastle Port have continued their slide this week. On 10th August the price stood at US$76.13 per tonne and at 4th September at US$66.30 per tonne.

A thermal coal exporter, together with strengthening of the Aussie, with sales at 5 million tonnes per annum would see a fall in profits of AU$75 million.
Most miners will have have taken the money market option of fixing the rate against the dollar at the time of agreements of forward sales, to the sum involved. The better quality miners will have offset a lot of this in the run up to March 2010. Worth checking those Annual Results and Quarterly Reports.
 
FAT Prophets says the 25% drop in the Shanghai Index since May 2009 is no cause for concern for the Australian coal mining industry. The fall has sparked concern as China has been one of the major buyers of the country’s coal throughout the global financial crisis.
But the financial advisors claim China’s demand for coal will continue to grow, despite the drop.

The group’s head of mining research, Gavin Wendt, says China still remains one of the strongest national economies.Also, Wendt says Australia has survived the biggest economic meltdown in living memory so there is tremendous cause for optimism.
Went claims the world is going to continue to grow, not only China. He says India also wants to source increasing amounts of coal as well.

Fat Prophets believes the outlook for Australia’s coal industry is extremely positive but warns of volatility in the short-term.
 
pacestick said:
FAT Prophets says the 25% drop in the Shanghai Index since May 2009 is no cause for concern for the Australian coal mining industry. The fall has sparked concern as China has been one of the major buyers of the country’s coal throughout the global financial crisis.
But the financial advisors claim China’s demand for coal will continue to grow, despite the drop.
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In support of the claims ...

Bloomberg has reported that BHP Billiton (ASX: BHP) said China’s demand for coking coal is “sustainable” after shipments of the steelmaking ingredient surged 30-fold.

Imports of coking coal into the world’s largest steel- producing country will be about 30 million metric tons this year, up from 1 million tons last year and 3 million tons in 2007, said Vicky Binns, head of commodity analysis at BHP. The 30 million tons is about 7 percent of China’s total current consumption, she said. Melbourne-based BHP is the largest producer of coking coal through its BHP Mitsubishi Alliance with Japan’s Mitsubishi Corp.
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noirua said:
Thermal coal prices out of the Newcastle Port have continued their slide this week. On 10th August the price stood at US$76.13 per tonne and at 4th September at US$66.30 per tonne.

A thermal coal exporter, together with strengthening of the Aussie, with sales at 5 million tonnes per annum would see a fall in profits of AU$75 million.
Most miners will have have taken the money market option of fixing the rate against the dollar at the time of agreements of forward sales, to the sum involved. The better quality miners will have offset a lot of this in the run up to March 2010. Worth checking those Annual Results and Quarterly Reports.
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By any chance this is CEY you're talking about?
 
Thermal coal futures continue to firm for Newcastle:
2009 - $72.10 - $74.20
2010 - $77.25 - $83.45
2011 - $87.20 - $95.85
2012 - $97.35 - $98.95
2013 - $102.20 - $103.15
2014 - $104.50 per tonne

Deloitte have forecast thermal coal prices at $70 per tonne beyond 2013 - is this forecast over gloomy?
 
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