Australian (ASX) Stock Market Forum

Coal - where to now?

Jump to new
Hi just soem new addtions to the list

Coal (Thermal & Coking) - CEY, FLX, GCL, MCC, NHC, WHC, AQA, RIV, COK, CZA, PRC, CNA, AVA, NEC, CDS, CES, EQX, EER, RCI, BWN, GNM, ATQ, TCM, FSE, CAG, CWK, REY, LOD, SRL, MLM, WES,

Coal Seam Gas (CTL & UCG) - GLX, BLK, LNC, AOE, SXP, MEE, CXY, PES, ESG, MPO, BUL, QGC, SHG, MEL, ENB, ORG, PGS, MAE, GEL

thx

MS
 
is the coal run over? or just a temporary thing?

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.
Click to expand...

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.
Click to expand...
http://www.theglobeandmail.com/servlet/story/LAC.20080703.RCOAL03/TPStory/Business
 
agro said:
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.


http://www.theglobeandmail.com/servlet/story/LAC.20080703.RCOAL03/TPStory/Business
Click to expand...

Hey I wonder wher ethey got those spot prices from?

If you go to http://www.globalcoal.com its actually gone up a new high of $190+?

NEWC Index
06-Jun-08 158.53
13-Jun-08 160.23
20-Jun-08 162.66
27-Jun-08 172.10
04-Jul-08 194.79

3_7_2008_weekly.gif


thx

MS
 

Attachments

  • Felix2.JPG
    Felix2.JPG
    93.7 KB · Views: 2
  • Felix3.JPG
    Felix3.JPG
    102.2 KB · Views: 0
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.
 
noirua 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.
Click to expand...

Yep btw a few new coal companies BTU & AAL

Coal (Thermal & Coking) Majors - CEY, FLX, GCL, MCC, NHC, WHC, AQA, RIV, COK, CZA, PRC, CNA, AVA, NEC,
Coal (Thermal & Coking) Minors: CDS, CAG, CES, EQX, EER, RCI, BWN, GNM, ATQ, TCM, FSE, CWK, REY, LOD, BTU, AAL, SRL, MLM, WES,

Coal Seam Gas (CTL & UCG) - GLX, BLK, LNC, AOE, SXP, MEE, CXY, PES, ESG, MPO, BUL, QGC, SHG, MEL, ENB, ORG, PGS, MAE, GEL

Thx

MS
 

Attachments

  • BTU.jpg
    BTU.jpg
    67.2 KB · Views: 1
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.
 
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
 
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.
 
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.
 
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
 
imajica said:
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
Click to expand...

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.
 

Attachments

  • Caol.jpg
    Caol.jpg
    41.5 KB · Views: 1
Garpal Gumnut said:
Can anyone advise me on the better coal plays at this point in time?

gg
Click to expand...

Hm below is quote from another site

ScreenShot006c.gif

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.
Click to expand...

Coal (Thermal & Coking) Majors - CEY, FLX, GCL, MCC, NHC, WHC, AQA, RIV, COK, CZA, PRC, CNA, AVA, NEC, WES
Coal (Thermal & Coking) Minors: CDS, CAG, CES, EQX, EER, RCI, BWN, GNM, ATQ, TCM, FSE, CWK, REY, LOD, BTU, AAL, SRL, MLM, CCD

Coal Seam Gas (CTL & UCG) - GLX, BLK, LNC, AOE, SXP, MEE, CXY, PES, ESG, MPO, BUL, QGC, SHG, MEL, ENB, ORG, PGS, MAE, GEL

Thx

MS
 
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.
 
Top