Argus Coal Daily International

Transcription

1 Coal Market Prices, News and Analysis International Coal Markets International coal prices Heat Basis Sulphur Period Port Price Change 6,000 kcal NAR up to 1% in days cif ARA ,000 kcal NAR up to 1% in days fob Richards Bay ,000 kcal NAR up to 1% in days cif Marmara ,000 kcal NAR up to 1% in days fob Baltic ports nc 6,000 kcal NAR up to 1% in days fob Vostochny nc 6,700 kcal ADB up to 1% in days cif Japan nc 6,700 kcal ADB up to 1% in days cif South Korea nc 5,800 kcal NAR up to 1% in days fob Qinhuangdao nc 5,0 kcal NAR up to 1% in days fob Qinhuangdao China domestic nc 5,0 kcal NAR up to 1% in days cfr South China nc 6,000 kcal NAR up to 1% in 60 days cfr South China nc 6,000 kcal NAR up to 1% in days fob Newcastle nc 5,0 kcal NAR up to 1% in days fob Newcastle nc 6,0 kcal GAR up to 1% in days fob Indonesia 86. nc 5,800 kcal GAR up to 0.8% in days fob Indonesia nc 5,000 kcal GAR up to 0.6% in days fob Indonesia nc 4,200 kcal GAR up to 0.4% in days fob Indonesia nc 3,400 kcal GAR up to 0.2% in days fob Indonesia nc 11,300 Btu GAR up to 1% in days fob Puerto Bolivar nc 12,000 Btu GAR up to 1% in days fob Hampton Roads nc 6,000 kcal NAR up to 1% in days fob Hampton Roads nc 11,300 Btu GAR up to 3% in days fob New Orleans ,000 kcal NAR up to 1% in days fob New Orleans 78. nc International coking coal prices Specification Delivery period Price Change fob Australia in days nc cfr Japan in days nc cfr North China in days nc North China domestic in days nc North China domestic (Yuan/t) in days 1,4 nc cif east coast India in days nc fob Hampton Roads (low-vol) in days 156. nc fob Hampton Roads (high-vol) in days nc Argus cif ARA spot coal assessment hh Page 1 of 5 hh Welsh coal mining finds resurgence Rising international coal prices have helped a resurgence in production in Wales, UK, but it could be short-lived. Welsh coal output has been increasing since 2008 a trend that is expected to continue in Second-quarter production was marked 26pc higher than the previous quarter at 702,456t, according to the UK s Coal Authority. Rising international coal prices have encouraged companies to reopen mines, such as the Tower colliery. European delivered coal prices gained around 31pc/yr in 2010 and 2011, with average prices in 2011 marked around $/t higher at $121/t than $70/t in Tower was closed as an underground mine in January 2008 but Hargreaves Services reopened the site as a surface mine in April this year with plans to supply 0,000 t/yr to German utility RWE s Aberthaw coal-fired power plant. Most of the coal produced in Wales is burned at Aberthaw, with smaller amounts sold to English power plants and into the domestic market. Aberthaw the larger of two coal-fired power stations in Wales receives around 1mn-1.5mn t/yr of locally produced Welsh coal, which is less than half of its annual demand. The station is designed specifically for the semi-anthracitic, low-volatility coal found in local mines, in that the fuel intake is located as low as possible into the boiler, which allows more time for the coal to combust. RWE blends domestic coal with imported lowsulphur coal to reduce its emissions. But domestic supply could tail off from 2018 if coal prices continue to decline as they have since January this year. Falling prices coupled with expensive gasoil has squeezed profits for UK mining firms this year. Welsh producer Miller Argent Aberthaw s largest supplier has proposed a new surface mine called Nant Llesg located adjacent to its existing Ffos-y-fran site, which would produce 6mn-7mn t between mid-2015 and The project is in its early stages of planning, with an application not yet approved by the local council. Inside today s Argus Coal Daily International Swaps slide in quiet trade Italian burn slips in July Offers of Russian coal to Turkey stay firm Australia s Wesfarmers sees higher production Freight rates down amid poor US grain season Copyright 2012 Argus Media Ltd

2 Forward Coal Prices Forward prices Timing Buy Sell Average cif ARA (Rotterdam) API 2 September Q Q Q Q Q fob Richards Bay South Africa API 4 September Q Q Q Q Q API2/API4 differential Prompt South Africa to Europe, implied freight rate, Q Q Q Q Q Swaps slide in quiet trade European coal swaps fell for the third consecutive session today amid subdued trading. After traded volumes peaked yesterday as a rail strike in Colombia was resolved, liquidity was low in the over-the-counter market. It took a good two hours for the calendar 2013 contract to start trading, and that just set the mood for the day, one broker said. The heaviest losses were seen at the front of the API 2 curve, with September shedding 65 /t on the day to close at $93.60/t. But losses were marginally slimmer along the curve, with fourth quarter trading at an intra-day high of $94.85/t, before settling at $94.55/t down by 45 /t on yesterday s close. The front was well bid yesterday, but today has not found much support. It caught up with the slide on the calendar 2013 contract over the last couple of days, another broker said. Around 2.2mn t changed hands on the calendar 2013 API 2 contract today, compared with almost 5mn t yesterday. Calendar 2013 opened lower at $99.75/t, and slipped slightly to close at $99.70/t, off by 25 /t on the previous close. In the European physical market, a US producer sold a,000t October cargo on screen at $93./t to a German traderutility des Amsterdam or Rotterdam. The deal was booked with exchange of futures for physical. In the South African fixed price market, a,000t October cargo was bid on screen at $89.75/t fob Richards Bay (RB), with an offer against it for a similar shipment at $/t fob RB. In the South African floating price market, a,000t September cargo was sold on screen at a discount of $1./t to the API 4. Rotterdam swaps forward curve Richards Bay swaps forward curve Sep-12 Q Q Q Q Q Sep Q Q Q Q Q Argus Coal Daily International is published by Argus Media Ltd. Registered office: Argus House, 175 St John St, London, EC1V 4LW Tel: Fax: sales@argusmedia.com ISSN Copyright notice Copyright 2012 Argus Media Ltd. All rights reserved. By reading this publication you agree that you will not copy or reproduce any part of its contents (including, but not limited to, single prices or any other individual items of data) in any form or for any purpose whatsoever without the prior written consent of the publisher. Trademark notice ARGUS, ARGUS MEDIA, the ARGUS logo, ARGUS COAL DAILY INTERNATIONAL, other ARGUS publication titles and ARGUS index names are trademarks of Argus Media Ltd. The API 2, API 4 and API 6 trademarks are owned by Argus Media Ltd and IHS (Global) Limited. Visit /trademarks for more information. Publisher: Adrian Binks Chief operating officer: Neil Bradford Global compliance officer: Jeffrey Amos Commercial manager: Jo Loudiadis Editor in chief: Ian Bourne Managing editor: Cindy Galvin Editor: Dan Hayes Tel: coal@argusmedia.com Customer support and sales: support@argusmedia.com London, UK Tel: Fax: Moscow, Russia Tel: Fax: Singapore Tel: Fax: Tokyo, Japan Tel: Fax: Argus Media Inc, Houston, US Tel: Fax: Argus Media Inc, Washington DC, US Tel: Fax: Page 2 of 5

3 Shipping Costs Spot freight to Rotterdam Cape Port Country Rate Change Richards Bay South Africa Puerto Bolivar Colombia Panamax Port Country Rate Change Richards Bay South Africa Puerto Bolivar Colombia 13. nc Gdansk Poland 5. nc Murmansk Russia Other spot freight Route/Size Rate Change West coast Australia to north China 1,000t East coast Australia to south China 1,000t nc South Africa to China 1,000t Asia-Pacific freight analysis (Panamax 60,000t size) Freight Delay Delivery Delivered Landed Origin Destination rate (days) cost 1 cost 2 cost 3 Australia Japan Australia South Korea Indonesia (60 kcal) Japan Indonesia (5800 kcal) Japan Indonesia (5800 kcal) South Korea Indonesia (5800 kcal) China Indonesia (00 kcal) South Korea Indonesia (00 kcal) China Indonesia (4200 kcal) India Indonesia (4200 kcal) China Indonesia (3400 kcal) India (1) Delivery cost = Argus freight rate plus demurrage delays at load port plus bunker costs for the specific voyage (2) Delivered cost = Delivery cost plus cost of coal (3) Landed cost = Argus freight rate plus cost of coal Generating Costs UK spark spreads Country Price Spark Spread Conversion Power /MWh UK $/MWh equivalent Coal Rotterdam $/MWh equivalent % Gas p/th NBP $/MWh equivalent % Fuel oil Rotterdam $/MWh equivalent % Germany spark spreads Country Price Spark Spread Conversion Power /MWh Germany $/MWh equivalent Coal Rotterdam $/MWh equivalent % Gas /MWh BEB $/MWh equivalent % Fuel oil Rotterdam $/MWh equivalent % UK spark spreads $/MWh Germany spark spreads $/MWh Coal Gas Fuel oil -1 Coal Gas Fuel oil UK Spark Spreads Electricity prices are first month over-the-counter UK market prices from Argus European Electricity report. Coal prices are for over-the-counter cif Rotterdam within days taken from the Argus Coal Daily International report. These prices are also reported in Argus Coal Daily. Natural gas prices are first month over-the-counter prices for UK NBP gas from the Argus European Natural Gas. The fuel prices are for 1pc sulphur cif northwest Europe bulk cargoes from the Argus European Products report. Thermal efficiency of coal is 38pc, of natural gas 49.13pc and fuel oil 38pc. Prices are converted into US dollars for comparative purposes. All dollar prices in Argus Coal Daily International are US dollars unless specified. German Spark Spreads Electricity prices are first month over-the-counter German market prices from Argus European Electricity report. Coal prices are for over-the-counter cif Rotterdam within days taken from Argus Coal Daily International report. These prices are also reported in Argus Coal Daily. Natural gas prices are German BEB first month taken from Argus European Natural Gas. The fuel prices are for 1pc sulphur fob ARA barges from the Argus European Products report. Thermal efficiency of coal is 38pc, of natural gas 49.13pc and fuel oil 38pc. Prices are converted into US dollars for comparative purposes. All dollar prices in Argus Coal Daily International are US dollars unless specified. The abbreviation t in the pricing tables represents metric tonnes except for US prices when it represents short tons. Page 3 of 5

4 Argus indexes Page of 6 Day ahead Month ahead Season ahead Total volume (GWh) -- Contents: Germany France -- Monthly ICI averages Argus Coal Daily International Richards Bay-Rotterdam, Capesize Australia to Japan, Panamax UK spark spreads for varying degrees of power station efficiency Australia - Japan Base load Commodity Spark spreads at varying conversion rates ( /MWh) Fuel type Fuel ( /MWh) Electricity, month-ahead base load ( /MWh) Month-ahead gas, NBP Carbon credits * * 1.45* 5.83* Coal, cif ARA Carbon credits * 14.61* 20.91* 23.21* Peak load Fuel type Fuel ( /MWh) Electricity, month-ahead peak load ( /MWh) Month-ahead gas, NBP Carbon credits * -4.30* 7.70* 12.08* Coal, cif ARA Carbon credits * 20.86* 27.16* 29.46* German spark spreads for varying degrees of power station efficiency Base load Commodity Spark spreads at varying conversion rates ( /MWh) Fuel type Fuel ( /MWh) Electricity, month-ahead base load ( /MWh) Month-ahead gas, BEB Carbon credits * * -6.34* -0.64* Coal, cif ARA Carbon credits * 11.55* 19.58* 22.51* Peak load Fuel type Fuel ( /MWh) Electricity, month-ahead peak load ( /MWh) Month-ahead gas, BEB Carbon credits * * 3.91* 9.61* Coal, cif ARA Carbon credits * 21.80* 29.83* 32.76* Spark spreads compare the cost of generating power. A positive spread indicates it is economical to generate power. A positive number for coal spread minus gas spread indicates it is more profitable to burn coal than gas. The model assumes that coal has a CO2e emissions factor of 0.34t/MWh of energy equivalent, and natural gas has one of t/MWh of energy equivalent. Power station efficiencies are then applied - 38pc for coal and 49.13pc for gas. In other words CO2e emissions from coal are assumed to be 0.94t/MWh of electricity and from natural gas t/MWh of electricity. All energy prices are for month-ahead delivery and are taken from the Argus European Electricity, Argus European Natural Gas, Argus Coal Daily International. Electricity prices are baseload. The EU ETS Allowance (EUA) price used is for The model does not take account of local taxes or transport costs. * Clean Spark Spread Argus European Electricity Daily Electricity Market Prices, News and Analysis Market headlines UK: Curve falls with gas Germany: Year ahead retreats but spot holds firm UK regulator updates grid tender proposal Spanish wind production reaches new record Swiss reservoir levels continue slow decline GDF Suez predicts stable prices until 2011 Dutch utility forecasts fall in sales UK utility proposes biomass plant Russian production down in February UK and Irish markets German and Alpine markets French market Dutch and Belgian markets Spanish and Italian markets Czech market Polish market Hungarian and Romanian markets Nordic market & Weather data Spark spreads Generation economics Market news Argus European OTC assessments /MWh Reported OTC trades are sent as a separate csv file UK* Germany Netherlands France Spain Nord Pool Poland Czech Hungary Day ahead Base load Peak load Week ahead Base load Peak load Month ahead Base load Peak load Quarter ahead Base load Peak load Year ahead Base load Peak load * UK assessments are for EFA months. UK year ahead is annual April/October. UK indexes /MWh , German indexes /MWh , France indexes /MWh Dutch indexes /MWh Czech indexes /MWh UK 3.98 France 0.75 Netherlands 0.75 Nordic Spain -0. Poland Czech Month-ahead base load differentials to Germany /MWh UK month-ahead base load /MWh Germany/France month-ahead base load /MWh 09-Jan 28-Jan 16-Feb 05-Mar European exchange summary Day +1 ( /MWh) Base load Peak load Off-peak French Powernext Dutch APX Belgian Belpex German EEX Phelix Austrian Exaa Polish Polpx Czech OTE Spanish Omel Portuguese Omel Nord Pool Romanian Opcom Italian PUN index Jan 30-Jan 17-Feb 05-Mar Copyright 2009 Argus Media Ltd 09O 0045 Thursday 05 March 2009 Argus European Electricity Argus European Electricity provides daily prices and market analysis for the deregulated power markets of the UK, Germany, France, Spain, the Netherlands, Austria, Switzerland, the Nordic region and central Europe. Prices are reported for all standard contracts traded on the spot market and forward curve, as well as spreads between the power, gas and coal markets. To receive a copy of the report, please sales@argusmedia.com Argus/Coalindo Indonesian Coal Index Report Weekly average ICI* prices Indonesian Coal Indices incorporating assessments by Argus Media and PT Coalindo** Grade Basis Price(US) Indonesian 60 Kcal GAR Indonesian 5800 Kcal GAR Indonesian 00 Kcal GAR Indonesian 4200 Kcal GAR Submissions to the Coalindo Panel - 14 Nov 2008 Indonesian 60 Kcal Indonesian 5800 Kcal Indonesian 00 Kcal Indonesian 4200 Kcal Aug Sep Oct Indonesian 60 Kcal Indonesian 5800 Kcal Indonesian 00 Kcal Indonesian 4200 Kcal Specifications FOB Kalimantan, per tonne Grade Timing Sulphur Ash TM Basis Size 6,0 kcal in days up to 1% up to 12% up to 12% GAR Panamax 5,800 kcal in days up to 0.8% up to 10% up to 18% GAR Panamax 5,000 kcal in days up to 0.6% up to 8% up to 30% GAR Panamax 4,200 kcal in days up to 0.4% up to 6% up to 40% GAR Tug and Barge Additional information about the underlying assessments used to produce the ICI can be obtained from the publishers. Argus Media PT Coalindo *ICI is a trademark of Argus Media Limited and PT Coalindo. ** Argus and Coalindo methodologies appear on page 2. Reproduction, scanning into an electronic retrieval system or copying to a database is strictly prohibited without the written permission of the publisher. Published weekly. Supplied under licence. Issue 046 Friday 14 November Copyright 2008 Argus Media Ltd Argus/Coalindo Indonesian Coal Index Report This report provides weekly and monthly average coal prices for five Indonesian grades traded in bulk on the international spot market. It also includes comparative graphs for other actively traded coal markets. The report is published by Argus in association with Coalindo. To receive a copy of the report, please sales@argusmedia.com Page 4 of 5

5 Coal Market News Italian burn slips in July Coal burn in Italy fell by around 2pc on the month in July, but was still marked higher than the same period last year, according to Italian market operator GME. Power generation from coal slipped to 2.69TWh in July from 2.75TWh in June, amid scheduled outages at German utility Eon s Fiumesanto plant and Italian utility Enel s Sulcis plant. But coal burn was still marked 7pc higher than July 2011 levels. GME notes that European coal prices began to recover slightly during the month, after having fallen steadily since January. But some traders said that Italian plants do not have enough flexibility to adjust burn in line with coal demand. The country is so dependent on natural gas, which is linked to oil in terms of price, so coal burn is usually at a maximum, one trader said. Electricity sales were 14pc higher on the month in July, at 24.82TWh, as a result of hot weather in the country, and it was largely gas that met the extra demand. Sales from gas generation were marked around 31pc higher on the month at 11.18TWh, leading coal to reduce its share of the fuel mix to 10.8pc from 12.6pc in June. High gas prices and falling international coal prices have led to an increase in coal burn in 2012 so far, compared with last year, as utilities take advantage of more profitable clean dark spreads. Coal s share of the Italian electricity mix was marked higher on the year in July, up by half a percentage point from 10.3pc in the same period last year. Freight rates down amid poor US grain season Dry bulk freight markets were mixed over the past week, with most rates still heading lower but pockets of strength turning up on some routes. Shrinking commodity demand and a poor US grain season remained the dominant themes in the dry bulk market. Sentiment remained relatively bearish, and shipbrokers had little expectation of an increase in rates in the near term. The cost of taking a Panamax vessel from the US northeast to the Amsterdam- Rotterdam-Antwerp (ARA) area fell 75 /t to $10./t. Losses were even more pronounced in the Capesize sector, with the cost of the US northeast-to-ara journey falling by $1/t to $8/t. One Capesize vessel was fixed at just $5.40/t for an east coast Canada ARA voyage, although that route carries a discount to those loading at ports further south. Some pockets of strength remained, and small gains were seen on certain Panamax routes, particularly those heading east or loading out of Colombia. The cost of taking a Panamax from Puerto Bolivar to ARA rose /t to $13./t. And the journey from the US northeast to Japan rose 25 /t to $38.25/t. Handysize rates out of Colombia were holding steady, with rates unchanged week on week. Charter rates are likely to improve in the medium term, according to Eagle Bulk shipping. I think that we are in the trough of the cycle right now with Capes at $4,0/d and supramax between $7,000/d and $12,000/d. I think we are at the bottom, Eagle Bulk chairman Sophocles Zoullas said on the company s quarterly earnings call. Offers of Russian coal to Turkey stay firm Offers of pure Russian coal for delivery to the Turkish Marmara Sea remained at the firm level of $109/t this week, but trading was thin on the back of higher petcoke (petroleum coke) demand. The premium of Russian coal to petcoke has increased this week, making petcoke much more competitive, especially for cement buyers. Petcoke from the US Gulf coast with a calorific value of around 7,000 kcal/kg and sulphur content of around 5pc is being offered into Turkey at around $/t on a delivered basis. Buying petcoke now makes much more sense as it has a higher calorific value, one buyer said. The only problem is with high sulphur content, which often exceeds 7pc, but cement producers would still be interested. Coal trading remained subdued this week with only one deal reported. A cement producer bought a,000t cargo of pure Russian coal with a calorific value of 6,000 kcal/kg for delivery in September via a tender at below $108/t. The shipment is understood to be split between two ports with 10,000t to be delivered to Ambarli in the Black Sea region and 40,000t to be delivered to a port in the Marmara Sea region. This is a very aggressive price, one trader said. Russian coal for delivery to the Marmara Sea is at around $109/t so someone clearly had a position to offload their volumes at a lower price level. Argus assessed the cif Marmara price at $109/t this week, slightly lower on the week, but higher by around $3/t on late July. Turkish delivered prices have risen in line with a similar price increase seen in the European market following strikes at Colombia s main railway Fenoco. No purchases of large shipments of US, Colombian or South African coal were made this week, although one seller was offering South African coal on a fob basis at a discount of $4/t to the API 4 index. Australia s Wesfarmers sees higher production Australian coal producer Wesfarmers saw a 3pc increase from a year earlier in its production for the financial year after expanding its Curragh and Bengalla mines. The firm s resources division, Wesfarmers Resources, produced just over 14mn t in the year to 30 June, up 400,000t year-on-year. Total sales volumes for the Curragh mine in Queensland s Bowen basin were 27.8pc above the previous year, reflecting the completion of Curragh s new coal handling and preparation plant in the final quarter, with mine capacity increased to 8mn-8.5mn t/yr of export coking coal. Price negotiations for the quarter ending in September 2012 for Curragh s coking coal exports comprising hard coking, semi-hard coking and the pulverised coal injection grade have now finished with the majority of customers. Price settlements for the quarter are approximately $220/t fob Queensland, with the weighted average for new contract prices of Curragh coking coal increasing by around 4pc compared with the previous quarter prices. Page 5 of 5