Friday, 07 May 2010
Colombian coal is continuing to head to Asia which is keeping availability tight in Europe and underpinning high prices. Colombian coal is flowing to east Asian countries such as China, South Korea and Taiwan, where it is delivered at a discount of as much as USD 15 per tonne to coal loading at Newcastle in Australia and Richards Bay in South Africa.
API 2 needs to strengthen relative to API 4 for Colombian coal to stop going to Asia. But opinions differ as to whether European power demand will recover this year to provide a boost to coal consumption, creating the necessary demand and change in prices.
Europe looks well supplied and demand relatively weak. Stocks are falling in Europe but remain relatively high. Europe's largest coal terminal, EMO in Rotterdam said that stocks were at 3.6 million tonnes which is lower than 3.8 million tonnes in mid April but still at historically high levels. Stocks peaked at 2.75 million tonnes in 2008.
Recent UK government figures also showed that although total stockpiles had fallen by 6% to 21.3 million tonnes in February, levels remained well above long term averages and are 5mn t higher than at the same time last year. Colombia's new strong relationship with east Asia was highlighted earlier this week, when South Korean utility Korea South East Power bought 460,000 tonne of Colombian coal in a tender, which originally stipulated 280,000 tonnes. The deal was done at around USD 107 per tonne CFR South Korea and will be delivered by two Capesize vessels between July and September.
Colombian coal is significantly better value than either Newcastle or Richards Bay, which at current prices equate to around USD 116 per tonne and USD 122 per tonne on a CFR East Asia basis, respectively.
Freight from Puerto Bolivar to East Asia is in the mid to high USD 30s per tonne range. Colombian coal on a fob basis is at discount of around USD 20 per tonne to the API 4 index, which equates to around USD 76 per tonne. Europe is still a big destination for Colombian coal, despite the volumes heading to Asia.
(Sourced from Argus Media)
Review: http://www.steelguru.com/news/index/MTQ0NjI2/Columbian_coal_continues_to_head_to_Asia.html
Colombian coal is continuing to head to Asia which is keeping availability tight in Europe and underpinning high prices. Colombian coal is flowing to east Asian countries such as China, South Korea and Taiwan, where it is delivered at a discount of as much as USD 15 per tonne to coal loading at Newcastle in Australia and Richards Bay in South Africa.
API 2 needs to strengthen relative to API 4 for Colombian coal to stop going to Asia. But opinions differ as to whether European power demand will recover this year to provide a boost to coal consumption, creating the necessary demand and change in prices.
Europe looks well supplied and demand relatively weak. Stocks are falling in Europe but remain relatively high. Europe's largest coal terminal, EMO in Rotterdam said that stocks were at 3.6 million tonnes which is lower than 3.8 million tonnes in mid April but still at historically high levels. Stocks peaked at 2.75 million tonnes in 2008.
Recent UK government figures also showed that although total stockpiles had fallen by 6% to 21.3 million tonnes in February, levels remained well above long term averages and are 5mn t higher than at the same time last year. Colombia's new strong relationship with east Asia was highlighted earlier this week, when South Korean utility Korea South East Power bought 460,000 tonne of Colombian coal in a tender, which originally stipulated 280,000 tonnes. The deal was done at around USD 107 per tonne CFR South Korea and will be delivered by two Capesize vessels between July and September.
Colombian coal is significantly better value than either Newcastle or Richards Bay, which at current prices equate to around USD 116 per tonne and USD 122 per tonne on a CFR East Asia basis, respectively.
Freight from Puerto Bolivar to East Asia is in the mid to high USD 30s per tonne range. Colombian coal on a fob basis is at discount of around USD 20 per tonne to the API 4 index, which equates to around USD 76 per tonne. Europe is still a big destination for Colombian coal, despite the volumes heading to Asia.
(Sourced from Argus Media)
Review: http://www.steelguru.com/news/index/MTQ0NjI2/Columbian_coal_continues_to_head_to_Asia.html
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