ARRC Update Feb 12th

USA:

Interior Responds to Wyden, Murkowski Coal Letter 

The Department of the Interior (DOI) has developed an action plan and convened a task force – with a focus on sales to overseas markets – to ensure that coal companies are properly reporting and paying royalties.  

Coal exports a major focus for US producers as supply needs change: execs 

A lack of global supply to meet projected overseas demand for thermal coal has US coal producers shifting their focus to exports, said executives Thursday at the Coaltrans USA conference in Miami, Florida.

INDONESIA:

1) Komatsu cuts forecast on Indonesia coal mining slump

Japan's Komatsu Ltd, the world's second-biggest maker of construction machinery, cut its annual profit for a second time as demand for mining equipment in Indonesia tumbled on the back of steep declines in thermal coal prices

2) Risk persists for Indonesian coal miners - S&P 

According to recent research by rating agency Standard & Poor’s, Indonesian coal miners will continue to feel the pinch of last year’s price weakness which in turn could erode their profitability for 2013.

CHINA:

1) Is China Big Coal's Cash Cow? Maybe Not

Increasing domestic supply could mean U.S. coal suppliers get the slip. IHS CERA came out with a long-term forecast that says China coal demand will peak soon and that its usable supply will increase as transportation capacity begins to catch up with the growth of domestic output.

2) Survey predicts 10% fall in coal imports 

China's coal imports will decline 10 percent year-on-year in 2013, the first drop in five years, due to increasing domestic supply and the country's improved transportation network, according to a Thomson Reuters survey.

3)  Great chart from EIA  that appeared in many articles:

4a) Time for change: China flags peak in coal usage

John Garnaut, a journalist who writes about Chinese politics and seems to have better access to Chinese leadership circles than most other journalists, wrote this short piece saying that Chinese experts saw their coal use is having peaked. The stats came from the energy research institute of NRDC, which has more power to act than the separate environmental bureau. The numbers don't seem to add up; but still this means that the Chinese government is paying attention. In a more concrete signal that Chinesepolicymakers cannot ignore the air pollution problem, China announced new emissions standards that had been stalled over the last three years as a result of disagreements between refiners and automakers. See 5).

4b) 'Too late' for China to cap coal use at 4b tonnes

An apparent response to John Garnaut's piece in the same publication. Article quotes UBS commodity analyst Tom Price ‘‘It’s highly likely their coal consumption rate will continue to lift by at least a couple of per cent,’’ he said, describing the 4 billion-tonne target as a ‘‘nice academic exercise’’.

5) China acts to combat air pollution

China has announced aggressive new standards for vehicle fuel in an effort to combat air pollution, its first concrete response to the heavy smog that has blanketed many Chinese cities this winter.  On Wednesday night the state council said that a new, low-sulphur standard for automotive diesel would become mandatory by the end of 2014. A stricter ultra low sulphur standard for both gasoline and diesel will take effect by 2017.  In addition to showing determination to address air pollution, this was also seen as a possible sign of the new government's willingness to limit the influence of SOEs.