weekly coal market update

Look at these retards at MQG. No bloody idea. Why don't they take a 1.5 hr trip up the F3 Freway from Sydney to Newcastle and count the number of coal ships waiting to load instead of sitting in their air coniditioned offices in Bond Street. Idiots.

Thermal was at about $108 in October, so essentially it's making it's way back from it's lows at $70 (ssdly the same can't be said for MQG's share price). Just wait for energy prices to start rallying due to the weakening pound sterling.

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Macquarie cuts 09 coal price forecast on weak demand
PERTH, Jan 20 (Reuters) -

Macquarie Group (MQG.AX) has cut its 2009 forecast for thermal and coking coal prices, citing slackening demand from end users and increased supplies, and downgraded ratings on two coal companies.
The Australian bank cut its forecast for 2009 benchmark contract prices for hard coking coal, used in steelmaking, by 21 percent to $110 a tonne, compared with $300 a tonne struck last year.

Thermal coal prices, used in power generation, are expected to drop 40 percent from a year ago to $75 a tonne, Macquarie said in a research note led by Adam Worthington that was issued on Tuesday.

Its previous forecast for thermal coal was $105 a tonne.

The bank cited a continued deterioration in steel market as the key reason for a pull back in coking coal prices, adding that the reversal in steel production for 2009 could see seaborne metallurgical coal demand drop 12 percent, or by 27 million tonnes.

In the thermal coal market, Macquarie said slowing demand and improved supply led by China and Australia were major factors pressuring prices.

The bank also cut its price forecasts for Thailand's Banpu BANP.BK, Indonesia's United Tractors Tbk (UNTR.JK), Indo Tambangraya Megah (ITMG.JK) and Bayan Resources (BYAN.JK), though it their rating at "outperform".

It however downgraded Indonesia's Indika Energy (INDY.JK) to "neutral", saying the firm's 2009 earnings were at risk, while Hong Kong's Hidili Industry (1393.HK) was also downgraded to underperform on a weak coking price outlook.

source: Reuters 20 January 2009




Australian coal traded at month high of near $92
PERTH, Jan 20 (Reuters) - A flurry of trades for prompt-loading Australian coal exchanged hands on Tuesday, with prices reaching a two-month high near $92 a tonne, fuelling speculation some sellers were posturing ahead of annual term contract negotiations. Two small parcels of Australian coal for February delivery were traded at $91 and $91.65 a tonne, respectively, the highest since mid-November last year, when cargoes for delivery in the second-quarter of 2009 were traded at $92 a tonne free-on-board at Newcastle. Several parcels of Australian coal for March delivery also exchanged hands at between $80 and $83 a tonne, electronic platform globalCOAL said on Tuesday. The string of trades on Tuesday comes on the heels of 11 other physical trades that have occurred since Friday, when prompt-loading Australian coal exchanged hands around the mid-$80s level, when the index was hovering below $80 a tonne. The robust prices paid in the recent trades, which come amid tepid Asian demand, have raised eyebrows among some in the industry. According to several industry sources and producers, the latest trades could be due to some posturing ahead of preliminary contract talks between Australian coal producers and key Japanese utilities for the headline coal contracts that begin in April 1, 2009, the start of Japan's fiscal year. "Some parties could also be wanting to influence the index prices through these trades," said a Sydney-based coal trader.
"Or it could also be that some traders are short on coal and are trying to make up some tonnes urgently." Industry sources said recent tender results showed that end-users were able to buy prompt-loading coal at much cheaper prices. South Korean utility Korea South-East Power Co's (KOSEP) recent tender results showed that winning bids were priced at about $63 a tonne for coal with a heating value of 5,100 kcal (NAR), a trader who participated in the tender, said. The bids represent about $72 a tonne when compared with globalCOAL's NEWC index's standard coal specification of 6,080 kcal/kg (NAR). "There is plenty of coal floating around in the market, either in Australia, Indonesia or South Africa. It's hard to imagine why someone would pay a $20 premium above index prices when it's possible to buy coal even at below index prices," said a Singapore-based trader. Thermal coal prices on the globalCOAL Newcastle weekly index rose $4.52 to $85.98 a tonne in the week ended Jan. 19.

Source: Reuters (20 Jan 2009)