ARRC Internal Recap FEB 26th
Panamax coal freight rates in the Pacific increased. The Indonesian Coal Mining Association is expecting an increase in Indonesian production of thermal coal if prices stay at/above current levels.
According to Platts, spot business into China has not picked up since the ending of the lunar new year as some in the market expected; and traders are now looking to next week's National People's Congress (NPC) meeting as a potential catalyst. The Chinese Ministry of Finance announced something akin to a carbon tax in response to increasing pollution fear and IHS published a research report saying the Chinese market is not the "promised land" that coal companies want you to think it is.
In the U.S.A., Cloud Peak energy signed an option that would allow it to ship up to 16 million tons/year through the Gateway Pacific Cherry Point terminal (if it can get regulatory approvals); and, the mayor of Seattle and the governor of Oregon opposed export coal trains crossing their turf. The Sightline Institute, a non-profit based in Seattle, issued a report highlighting the financial and operational weakness of Ambre Energy, a major proponent of coal exports through the Pacific Northwest.
LINKS:
PLATTS 22 Feb 2013
Panamax freight rates are expected to remain strong in the coming weeks, helped by grain cargoes from the east coast of South America, sources said.
BLOOMBERG
By Fitri Wulandari - Feb 19, 2013
Coal output from Indonesia, the world’s largest exporter of the fuel for power-stations, may rise by 5.2 percent this year.
The country may produce 400 million metric tons as long as prices stay above $92 a ton, Bob Kamandanu, the chairman of Indonesian Coal Mining Association, said in an interview while attending a conference in Singapore today. Output was 380 million in 2012.
PLATTS 26 Feb 2013
Buying interest stayed muted at south China's trading hubs for imported thermal coal Tuesday, and CFR delivered prices were rangebound at $86/mt and remain capped by competitively priced domestic thermal coal, traders said.
The Chinese spot market has lacked direction for several weeks, and international traders were hoping that a key meeting of the Chinese parliament next week could provide a fillip to demand.
ELLA CHOU
Practical implications: 1) it is a tax, which is better than a fee; 2) it is a pollution discharge tax, carbon is only small part of the targeted emission. Effect: don't expect too much. At the same, this could be a start in internalizing unpriced factors behind the one of the largest and most dangerous imbalances in Chinese economy.
Coal imports set to peak before end of the decade and decline, major new IHS study says
(February 7, 2013) – Chinese coal imports will peak before the end of the decade and enter a prolonged period of decline, challenging assumptions that the country’s demand for internationally-traded steam coal could continue to rise inexorably, according to a major new IHS study. A moderation of demand combined with a rise in domestic supply and improved transportation will bring international producers into increased competition with domestic suppliers, the study says.
ASSOCIATED PRESS AND — THE BELLINGHAM HERALD
A Wyoming mining company has signed an option agreement allowing it to ship up to 16 million tons of coal a year through Gateway Pacific Terminal at Cherry Point — if that project can get the regulatory approvals it needs.
Cloud Peak Energy said Wednesday's deal involving Gateway Pacific Terminal, proposed by SSA Marine of Seattle, will allow it to expand overseas sales amid weak domestic demand.
Two Northwest political leaders, speaking 180 miles apart, sharply criticized both the local impacts and global implications of the proposed creation of export terminals in Washington and Oregon that would move huge quantities of coal to China.
“Coal trains would be a disaster for our city,” Seattle Mayor Mike McGinn declared in his annual state-of-the-city speech. “. . . These coal trains, each over a mile long, would disrupt our traffic and freight mobility. It would cut off our waterfront and would make it harder for first responders to get to the scene of an emergency.”
By Bill DiBenedetto | February 26th, 2013
Australia’s Ambre Energy has big plans to open two coal train export terminals in Washington and Oregon, but does it have the financial wherewithal to pull it off? Maybe not, according a report from the non-profit Sightline Institute. The report “Ambre Energy: Caveat Investor,” catalogs a number of financial woes for the company, including money-losing coal mines, large write-offs for failed overseas ventures, major liabilities for mine cleanup and pensions, troubled assets, high borrowing costs, and a need for $1 billion in new capital to make its coal projects financially viable.