show me the money, page-2

Tug of war between US and Australian miners might be a leveler


Asian market has become a fighting turf for the Australian and American. Round one undoubtedly going to Uncle Sam, Kangaroos must be bracing for a leap.

Statistics shows a distinct loss gain equation with US shipments increasing by 10% from 21 million tonne to 23 million tonne in Q1. Australian on the other hand have lost by equal margin from 44 million tonnes to 39 million
tonnes (11%) in shipments through Queensland port.
US producers are targeting the Asian s eabornemarket as domestic demand flounders, as a result of the ongoing shale gas incursion into the power gen¬eration sector. First time in history US power generation fuel was a 50/50 split between gas and coal.

In this zero sum game the US miners have operated on wafer thin margin. Host of major coal produc¬ers with high debt loads and low mar¬gins, could follow suit in the com¬ing months like Patriot Coal - unless global coal prices find some buoyancy.

Such skimpy profit has coerced mine owners to think about closure rather than bleed.

Australian scene mired in IR issues and labor unrest seems redeem its lost ground. However stupefied hangover of the past might prove detrimental for the miners. Australian miners are at the risk of finding themselves in a hapless situation unless buying picks up leading to surge in production globally.

Going by the current price mapping most of the Australian miners are perched in perilous upper quar tilewhich might be decimating if the global demand does not turn around.

The coming days will see activity if not for price improvement but certainly re-alignments in supply and cost dynamics leading to shuffle in the primacy.

Source - SRI

(www.coalguru.com

- coldry will make those margins interesting punters IMO