Coal dust, gold dustCoal stocks, led by seaborne coking coal,...

Coal dust, gold dust

Coal stocks, led by seaborne coking coal, remain in excellent demand.
Author: Barry Sergeant
Posted: Monday , 01 Mar 2010

JOHANNESBURG -

Demand for listed coal stocks, especially those outside China, continues, on reports that prices generally are finding increased traction in a recovery trend. A good amount of focus has been enjoyed by miners of seaborne coking (metallurgical) coal, a premium market where China, long the world's biggest coal miner, turned into a net coking coal importer during 2009.

Coking coal is a bedfellow to iron ore; for some years now, China has ranked No 1 in steelmaking and, thus, in both iron ore and coking coal consumption. Marius Kloppers, CEO of BHP Billiton, part of the BHP Billiton-Mitsubishi alliance, the world's biggest producer of seaborne coking coal, explained during presentations last month how Chinese pricing, which dominates global pricing, was now effectively being decided in a "single" market.

"In coking coal now" explained Kloppers, "we effectively have one pricing complex across the domestic Chinese market, which is - I don't have the exact figure in my head, but you know, 500 million tonnes of coking coal, and a seaborne market of 200 million tonnes. We have a 700 million tonne pricing complex, which is connected. Which means that our strategy in markets like that is to run at maximum volume, and to let the marginal producers set the price, and that's going to happen in coking coal".

A similar phenomenon occurred a few years earlier in iron ore, where China has also long been the world's biggest miner. After China turned into a net importer of iron ore, the world's seaborne iron ore market was quickly turned into the world's most profitable mining franchise, playing a heavy weighting in ensuring that the three kings of that trade, Vale, Rio Tinto, and BHP Billiton, would be ranked as the world's three most valuable miners, by value.


RIV investors - If the barging / dredging gets environmental approval, you had better be locked and loaded into RIV. This is the prime key for (current) value enhancement, IMO = unfetted access to seaborne market

Good luck to LT holders.

Cheers, Skip