Canadian coal miner Cline Mining has raised C$6.9 million to complete the rehabilitation of its New Elk thermal coal and metallurgical coal project in Colorado. C$3.9 million has come in the shape of a loan from Mitsui Matsushima International Pty of Tokyo with the rest coming from a private placement of shares and warrants.
The New Elk coking coal mine is situated near the town of Trinidad in Colorado. It has a coal resource of 315 million tons of coal and will directly employ 450 employees. The mine rehabilitation program is presently in due for completion in July 2010 with the first saleable production of coking coal expected in the fourth quarter of 2010. The mine will reach an annual capacity of 1.3 million tons in 2011, proceeding continuously to the production and sale of 3.0 million tons of coal annually, slated for world export markets.
The Mine has large in-place compliant coal resources and Cline expect further significant production in the future.
Showing posts with label met coke. Show all posts
Showing posts with label met coke. Show all posts
Friday, February 12, 2010
Wednesday, February 3, 2010
Czech Republic's NWR Agrees Coke Price Hike
Czech coal miner NWR said on Wednesday that it has agreed Q1 contracts with an 18 percent rise in coking coal prices and 29 percent rise in coke prices. The price of coking coal will rise to 103 euros under the new contracts. Coking coal makes up 60 per cent of NWR’s output.
The miner is targeting steady coal production in 2010 after hitting 11 million tonnes last year, having earlier estimated production at 10.5 million tonnes for the year. A recovery in the central European steel industry has led to an increase in demand for NWR’s coking coal products.
The miner is targeting steady coal production in 2010 after hitting 11 million tonnes last year, having earlier estimated production at 10.5 million tonnes for the year. A recovery in the central European steel industry has led to an increase in demand for NWR’s coking coal products.
Monday, November 9, 2009
Rocklands Rebuffs Jindal Revised Offer
Jindal Steel and Power (JSPL) has raised its bid for Australian coal miner Rocklands Richfield to match a counteroffer by a Chinese firm, only to be rebuffed by the Aussie firm.
Rocklands said the AUS $0.52 a share offer by China’s Meijin Energy was still “superior” than the revised bid made by Naveen Jindal’s JSPL.
The Australian firm has asked the Indian company to place a better bid. Jindal Steel had earlier offered AUS $0.42 a share and signed a term sheet with the Rocklands management on September 22.
After Meijin threw its hat in the bid ring, JSPL revised the offer to AUS $0.50, valuing the company at AUS $194.98 million, or around Rs 841 crore.
The latest Jindal offer is the same as the Ruias-owned Essar Group’s offer in October. Essar entered the fray in October 7 but dropped out of the race on October 20. Meijin Energy joined the bid battle on November 2 at a time when Jindal Steel was carrying out due diligence on Rocklands.
In the revised offer, JSPL wanted Rocklands to reject the Meijin offer, proposed infusion of new equity and sought board representation, all of which had been rejected by the Australian company.
Rocklands said the Chinese were giving a better deal, mainly because of the higher price.
JSPL, which has a steel mill and a power plant in Chhattisgarh and is expanding in Orissa, already owns 14.16 per cent in Rocklands.
The company is looking for coking coal abroad since there is an acute shortfall of the crucial raw material, used in steel making, in India.
Australia, South Africa and Indonesia are the three most sought-after destinations for steel companies seeking to own coking coal. China, which has large deposits of coking coal, rations export, thereby dictating the price.
The Rocklands acquisition will give JSPL entry into the Chinese coking coal market, which foreign companies find difficult to access.
The Aussie company has two metallurgical coke plants in China following its acquisition of China Coke and Chemicals in October 2007. These units make met coke from local coal.
Source: Calcutta Telegraph
Rocklands said the AUS $0.52 a share offer by China’s Meijin Energy was still “superior” than the revised bid made by Naveen Jindal’s JSPL.
The Australian firm has asked the Indian company to place a better bid. Jindal Steel had earlier offered AUS $0.42 a share and signed a term sheet with the Rocklands management on September 22.
After Meijin threw its hat in the bid ring, JSPL revised the offer to AUS $0.50, valuing the company at AUS $194.98 million, or around Rs 841 crore.
The latest Jindal offer is the same as the Ruias-owned Essar Group’s offer in October. Essar entered the fray in October 7 but dropped out of the race on October 20. Meijin Energy joined the bid battle on November 2 at a time when Jindal Steel was carrying out due diligence on Rocklands.
In the revised offer, JSPL wanted Rocklands to reject the Meijin offer, proposed infusion of new equity and sought board representation, all of which had been rejected by the Australian company.
Rocklands said the Chinese were giving a better deal, mainly because of the higher price.
JSPL, which has a steel mill and a power plant in Chhattisgarh and is expanding in Orissa, already owns 14.16 per cent in Rocklands.
The company is looking for coking coal abroad since there is an acute shortfall of the crucial raw material, used in steel making, in India.
Australia, South Africa and Indonesia are the three most sought-after destinations for steel companies seeking to own coking coal. China, which has large deposits of coking coal, rations export, thereby dictating the price.
The Rocklands acquisition will give JSPL entry into the Chinese coking coal market, which foreign companies find difficult to access.
The Aussie company has two metallurgical coke plants in China following its acquisition of China Coke and Chemicals in October 2007. These units make met coke from local coal.
Source: Calcutta Telegraph
Friday, November 6, 2009
Jindal Has Competition In Race For Rocklands
Jindal Steel & Power Limited has a new competitor in the race to acquire Australian coal miner Rocklands Richfield.
China’s Meijin Energy Group has come up with a higher offer, which has found favour with the existing management of Rocklands.
The Australian company has asked Jindal Steel to come back with a matching or higher bid, otherwise, it would terminate the ongoing discussions and allow the Chinese player to start exclusive talks.
Meijin is the third company to bid for Rocklands in as many months — India’s Essar Group had thrown its hat in the ring but soon opted out, leaving Naveen Jindal’s JSPL alone in the race.
Meijin Energy has offered to pay Australian dollar (AUD) 0.52 a share for Rocklands, higher than the AUD 0.42 being offered by JSPL.
Incidentally, Essar had offered AUD 0.50 a share for the Australian company but it did not receive formal support from the Rocklands management.
A Rocklands notice to the Australian Securities Exchange said it had received the Meijin bid on November 2, and after “careful consideration” it found that the bid was “superior” to the Jindal offer, which is 37 per cent lower.
However, the Rocklands board told its shareholders that neither the Jindal nor the Meijin proposals were formal offers at this stage. They are preliminary in nature and subject to due diligence, it said.
JSPL is carrying out a due diligence exercise after both parties signed a term sheet on September 22. According to the pact, Jindal was to complete the due diligence by October 31 and negotiate an implementation agreement by November 15.
On October 28, JSPL sought another month to complete the due diligence and sign the deal by December 15.
JSPL plans to invite Rocklands chairman Benny Wu to India for deliberations after it finishes its groundwork.
JSPL vice-chairman Naveen Jindal plans to visit Australia and China — where Rocklands has large operations — reflecting the Indian company’s keenness and commitment to the proposal.
Before the Meijin proposal came, both Rocklands and JSPL had agreed to extend the due diligence date to November 24 and seal the deal by December 8.
However, JSPL now faces the risk of being beaten by the Chinese company, which claims to be one of the biggest coke producers in China owning 10 coal mines with a combined reserve of 2 billion tonnes. The Meijin proposal values Rockland at AUD 200 million.
JSPL is one of the largest steel long products manufacturers in India with a mill in Chhattisgarh. It also runs a power plant there. The company is building a plant in Orissa and also expanding its power plant capacity in Chhattisgarh.
As the bid battle continues, JSPL has built up a strong position in Rocklands. It now holds a 14.16 per cent stake in the company. The shares were bought in three tranches from the open market and at a price lower than its own offer and that of Meijin.
Rocklands has two main assets — met coke plants in China and coal mines in Australia.
Source: Calcutta Telegraph
China’s Meijin Energy Group has come up with a higher offer, which has found favour with the existing management of Rocklands.
The Australian company has asked Jindal Steel to come back with a matching or higher bid, otherwise, it would terminate the ongoing discussions and allow the Chinese player to start exclusive talks.
Meijin is the third company to bid for Rocklands in as many months — India’s Essar Group had thrown its hat in the ring but soon opted out, leaving Naveen Jindal’s JSPL alone in the race.
Meijin Energy has offered to pay Australian dollar (AUD) 0.52 a share for Rocklands, higher than the AUD 0.42 being offered by JSPL.
Incidentally, Essar had offered AUD 0.50 a share for the Australian company but it did not receive formal support from the Rocklands management.
A Rocklands notice to the Australian Securities Exchange said it had received the Meijin bid on November 2, and after “careful consideration” it found that the bid was “superior” to the Jindal offer, which is 37 per cent lower.
However, the Rocklands board told its shareholders that neither the Jindal nor the Meijin proposals were formal offers at this stage. They are preliminary in nature and subject to due diligence, it said.
JSPL is carrying out a due diligence exercise after both parties signed a term sheet on September 22. According to the pact, Jindal was to complete the due diligence by October 31 and negotiate an implementation agreement by November 15.
On October 28, JSPL sought another month to complete the due diligence and sign the deal by December 15.
JSPL plans to invite Rocklands chairman Benny Wu to India for deliberations after it finishes its groundwork.
JSPL vice-chairman Naveen Jindal plans to visit Australia and China — where Rocklands has large operations — reflecting the Indian company’s keenness and commitment to the proposal.
Before the Meijin proposal came, both Rocklands and JSPL had agreed to extend the due diligence date to November 24 and seal the deal by December 8.
However, JSPL now faces the risk of being beaten by the Chinese company, which claims to be one of the biggest coke producers in China owning 10 coal mines with a combined reserve of 2 billion tonnes. The Meijin proposal values Rockland at AUD 200 million.
JSPL is one of the largest steel long products manufacturers in India with a mill in Chhattisgarh. It also runs a power plant there. The company is building a plant in Orissa and also expanding its power plant capacity in Chhattisgarh.
As the bid battle continues, JSPL has built up a strong position in Rocklands. It now holds a 14.16 per cent stake in the company. The shares were bought in three tranches from the open market and at a price lower than its own offer and that of Meijin.
Rocklands has two main assets — met coke plants in China and coal mines in Australia.
Source: Calcutta Telegraph
Wednesday, October 21, 2009
Essar Drops Out Of Race For Rocklands
Essar Steel has dropped out of the race to acquire Rocklands Richfield, leaving only Jindal Steel & Power in the fray.
The move by Ruia-owned Essar, which has interests in steel, shipping and telecom, comes less than two weeks after it joined the race for the Australian coal miner.
Rocklands today informed the Australian Securities Exchange that Essar did not wish to proceed with its AUS$0.50-a-share offer, which was made public on October 7.
Essar made the preliminary and non-binding offer even after Congress MP Navin Jindal’s JSPL signed a term sheet on September 22 with Rocklands.
JSPL had proposed to acquire a 100 per cent stake in the Australian company for AUS$0.42 a share.
In a letter to Rocklands, the Ruias did not offer any explanation on why they chose to exit abruptly.
An Essar spokesperson said: “As a group we keep looking at various opportunities but it is not our policy to comment on any specific deal.”
Once Essar’s withdrawal was made public, Rocklands’ share plunged 15.29 per cent to close at AUS$0.36.
Rocklands said Essar’s decision was based on external considerations and was not a reflection on the company.
Confidential and non-public information was not shared with the Essar management during the period its bid was valid.
Rocklands has written to Essar seeking clarifications on why it withdrew the proposal and whether it is possible for Essar to continue with the proposal. Essar will reply to the letter next week.
The Rocklands management was happy to see two Indian firms bidding for the company.
In the absence of Essar’s proposal, JSPL’s offer is now on. Rocklands said JSPL was already carrying out a due diligence exercise.
JSPL holds a 12.75 per cent stake in Rocklands. The firm shored up its holding in the Australian miner after Essar’s proposal became public.
Rocklands claims to have coal resources of 900 million tonnes. JSPL is setting up steel and power plants in the country and will require coal, especially the coking variety not abundantly available in India.
Rocklands has two main assets — met coke plants in China and coal mines in Australia.
Source: Calcutta Telegraph
The move by Ruia-owned Essar, which has interests in steel, shipping and telecom, comes less than two weeks after it joined the race for the Australian coal miner.
Rocklands today informed the Australian Securities Exchange that Essar did not wish to proceed with its AUS$0.50-a-share offer, which was made public on October 7.
Essar made the preliminary and non-binding offer even after Congress MP Navin Jindal’s JSPL signed a term sheet on September 22 with Rocklands.
JSPL had proposed to acquire a 100 per cent stake in the Australian company for AUS$0.42 a share.
In a letter to Rocklands, the Ruias did not offer any explanation on why they chose to exit abruptly.
An Essar spokesperson said: “As a group we keep looking at various opportunities but it is not our policy to comment on any specific deal.”
Once Essar’s withdrawal was made public, Rocklands’ share plunged 15.29 per cent to close at AUS$0.36.
Rocklands said Essar’s decision was based on external considerations and was not a reflection on the company.
Confidential and non-public information was not shared with the Essar management during the period its bid was valid.
Rocklands has written to Essar seeking clarifications on why it withdrew the proposal and whether it is possible for Essar to continue with the proposal. Essar will reply to the letter next week.
The Rocklands management was happy to see two Indian firms bidding for the company.
In the absence of Essar’s proposal, JSPL’s offer is now on. Rocklands said JSPL was already carrying out a due diligence exercise.
JSPL holds a 12.75 per cent stake in Rocklands. The firm shored up its holding in the Australian miner after Essar’s proposal became public.
Rocklands claims to have coal resources of 900 million tonnes. JSPL is setting up steel and power plants in the country and will require coal, especially the coking variety not abundantly available in India.
Rocklands has two main assets — met coke plants in China and coal mines in Australia.
Source: Calcutta Telegraph
Thursday, October 15, 2009
Coke Ovens "Getting Cleaner"
Coke oven technology in the 21st century will cut down on harmful gas produced by burning coal at high temperatures, whether its done by recovering the gaseous byproducts or burning them in the ovens, industry experts said on Tuesday.
The process by which noxious gases are burned in the coke ovens "is taking off in the U.S.," because it is a simpler process and poses less risk to the environment, said Hardarshan Valia, the co-chairman of the Met Coke World Summit, which opened yesterday in the Pittsburgh Hilton Hotel. The event, which has attracted more than 200 industry representatives from around the world, continues until Thursday.
"You can't smell the benzene or the other gases. Most of the steelmakers are going that way," said Valia, a metallurgical coal consultant and president of Coal Science Inc., a consulting firm in Highland, Ind.
Coke, produced by burning pulverized bituminous coal inside sealed ovens at high temperatures for about 18 hours, is used as fuel in a blast furnace to make steel. U.S. production of coke has dropped in recent years as the steel industry consolidated and coke production moved overseas, a result of increased demand in China and India, and stricter U.S. environmental regulations, Valia said.
The process where the gases are burned inside coke ovens uses the same principle as the H.C. Frick Coke Co.'s beehive coke ovens that dotted Fayette County in the late 1800s and early 1900s, but are not polluting the environment, said Hope Huntingdon of Murrysville, manager of technical services for Clark Laboratories LLC of Jefferson.
Unlike in Henry Clay Frick's day, when the coke ovens polluted the air, the gases are captured in process and burned up. "It's sucking the air in and not letting it escape," said Huntingdon, a former U.S. Steel Corp. researcher.
The more traditional process for reducing coke plant gas is the byproduct recovery system used along the Monongahela River at Clairton, where U.S. Steel operates the nation's largest coke manufacturing plant. The plant can produce about 4.7 million tons of coke annually.
In April, U.S. Steel postponed an $1.1 billion project to install new coke batteries and upgrade older ones because of a downturn in the steel industry.
Source: Pittsburgh Tribune
The process by which noxious gases are burned in the coke ovens "is taking off in the U.S.," because it is a simpler process and poses less risk to the environment, said Hardarshan Valia, the co-chairman of the Met Coke World Summit, which opened yesterday in the Pittsburgh Hilton Hotel. The event, which has attracted more than 200 industry representatives from around the world, continues until Thursday.
"You can't smell the benzene or the other gases. Most of the steelmakers are going that way," said Valia, a metallurgical coal consultant and president of Coal Science Inc., a consulting firm in Highland, Ind.
Coke, produced by burning pulverized bituminous coal inside sealed ovens at high temperatures for about 18 hours, is used as fuel in a blast furnace to make steel. U.S. production of coke has dropped in recent years as the steel industry consolidated and coke production moved overseas, a result of increased demand in China and India, and stricter U.S. environmental regulations, Valia said.
The process where the gases are burned inside coke ovens uses the same principle as the H.C. Frick Coke Co.'s beehive coke ovens that dotted Fayette County in the late 1800s and early 1900s, but are not polluting the environment, said Hope Huntingdon of Murrysville, manager of technical services for Clark Laboratories LLC of Jefferson.
Unlike in Henry Clay Frick's day, when the coke ovens polluted the air, the gases are captured in process and burned up. "It's sucking the air in and not letting it escape," said Huntingdon, a former U.S. Steel Corp. researcher.
The more traditional process for reducing coke plant gas is the byproduct recovery system used along the Monongahela River at Clairton, where U.S. Steel operates the nation's largest coke manufacturing plant. The plant can produce about 4.7 million tons of coke annually.
In April, U.S. Steel postponed an $1.1 billion project to install new coke batteries and upgrade older ones because of a downturn in the steel industry.
Source: Pittsburgh Tribune
Thursday, June 11, 2009
Sesa Goa Picks Up Dempo Mining Assets
Sesa Goa, a Vedanta Group company, has agreed to acquire the mining assets of Dempo Group for Rs 1,750 crore [note 1 crore = 10 million] in an all-cash deal. The assets include mining leases, rights and related infrastructure in Goa.
Sesa Goa on Thursday signed a definitive share purchase agreement to acquire VS Dempo and Co Pvt Ltd, which owns 100 per cent equity shares of Dempo Mining Corporation Pvt Ltd and 50 per cent in Goa Maritime Pvt Ltd.
The deal will be funded by Sesa Goa through internal accrual, which stands at Rs 4,143 crore as on March 31, 2009, the company said in a release late on Thursday.
Mr Anil Agarwal, Chairman, Vedanta Group, said the integration of Sesa and VSD’s operations will achieve greater synergy and it was an opportunity to consolidate the company’s iron ore business.
VSD, one of the largest exporters of iron ore from Goa, owns the rights to mine-able reserves and resources estimated at 70 million tonnes of iron ore in Goa.
The company’s assets include processing plants, barges, jetties, trans-shippers and loading capacities at Marmugao port. It produced 3.94 million tonnes of iron ore and sold 4.36 million tonnes in FY’09.
VSD’s unaudited revenue was about Rs 976 crore and EBITDA (earnings before interest, tax, depreciation and amortisation) in FY’09 was Rs 417 crore, the release said.
“We are extremely pleased to have reached this agreement with Sesa Goa, which will ensure long-term sustenance of VSD’s operations,” said Mr Shrinivas V. Dempo, Chairman and Managing Director, Dempo Group.
Sesa Goa, one of the large iron ore exporters, has also diversified into the manufacture of pig iron and metallurgical coke. The company also has mining operations Karnataka and Orissa and operates a 280,000 tonnes a year metallurgical coke plant and a 250,000 tonnes a year pig iron plant in Goa.
Goa-based Dempo Group is a diverse industrial house with interests spanning across mining, calcined petroleum coke, pig iron, shipbuilding, food and travel. V S Dempo & Co Pvt Ltd and Dempo Mining Corporation Pvt Ltd constitute the Goa mining business of the Dempo Group.
Dempo has been involved in iron ore mining, beneficiation and exports for nearly 60 years.
Ambit Corporate Finance acted as financial advisor and J Sagar and Associates was the legal advisors to VSD. Luthra and Luthra was the legal advisors to Sesa Goa in the transaction.
Sesa Goa exported about eight million tonnes to China in 2008-09.
Miners in Goa have lower costs as mines are located near the port, and so avoid road and rail charges.
India produces over 200 million tonnes of iron ore annually and exports about half the production. There are about 500 mines held by about 80 companies. However, only 250 mines are operational.
China is the major importer of iron ore from India, with its proximity helping to secure ores with low freight costs.
The demand for iron ore has been on the rise and the prices have surged 10 per cent in first week of June, touching a four month high on account of large scale imports by China which imported 55.5 million tonnes in May, up 25 per cent over the same period last year.
Source: The Hindu Business Line
Sesa Goa on Thursday signed a definitive share purchase agreement to acquire VS Dempo and Co Pvt Ltd, which owns 100 per cent equity shares of Dempo Mining Corporation Pvt Ltd and 50 per cent in Goa Maritime Pvt Ltd.
The deal will be funded by Sesa Goa through internal accrual, which stands at Rs 4,143 crore as on March 31, 2009, the company said in a release late on Thursday.
Mr Anil Agarwal, Chairman, Vedanta Group, said the integration of Sesa and VSD’s operations will achieve greater synergy and it was an opportunity to consolidate the company’s iron ore business.
VSD, one of the largest exporters of iron ore from Goa, owns the rights to mine-able reserves and resources estimated at 70 million tonnes of iron ore in Goa.
The company’s assets include processing plants, barges, jetties, trans-shippers and loading capacities at Marmugao port. It produced 3.94 million tonnes of iron ore and sold 4.36 million tonnes in FY’09.
VSD’s unaudited revenue was about Rs 976 crore and EBITDA (earnings before interest, tax, depreciation and amortisation) in FY’09 was Rs 417 crore, the release said.
“We are extremely pleased to have reached this agreement with Sesa Goa, which will ensure long-term sustenance of VSD’s operations,” said Mr Shrinivas V. Dempo, Chairman and Managing Director, Dempo Group.
Sesa Goa, one of the large iron ore exporters, has also diversified into the manufacture of pig iron and metallurgical coke. The company also has mining operations Karnataka and Orissa and operates a 280,000 tonnes a year metallurgical coke plant and a 250,000 tonnes a year pig iron plant in Goa.
Goa-based Dempo Group is a diverse industrial house with interests spanning across mining, calcined petroleum coke, pig iron, shipbuilding, food and travel. V S Dempo & Co Pvt Ltd and Dempo Mining Corporation Pvt Ltd constitute the Goa mining business of the Dempo Group.
Dempo has been involved in iron ore mining, beneficiation and exports for nearly 60 years.
Ambit Corporate Finance acted as financial advisor and J Sagar and Associates was the legal advisors to VSD. Luthra and Luthra was the legal advisors to Sesa Goa in the transaction.
Sesa Goa exported about eight million tonnes to China in 2008-09.
Miners in Goa have lower costs as mines are located near the port, and so avoid road and rail charges.
India produces over 200 million tonnes of iron ore annually and exports about half the production. There are about 500 mines held by about 80 companies. However, only 250 mines are operational.
China is the major importer of iron ore from India, with its proximity helping to secure ores with low freight costs.
The demand for iron ore has been on the rise and the prices have surged 10 per cent in first week of June, touching a four month high on account of large scale imports by China which imported 55.5 million tonnes in May, up 25 per cent over the same period last year.
Source: The Hindu Business Line
Wednesday, January 21, 2009
Gladstone Coal Exports Down 32 Percent
Coal exports from Australia’s Gladstone Port, the world’s fourth-largest coal export terminal, declined 32 percent in the first half of this month amid waning demand from steelmakers in Asia.
Shipments in the first two weeks of January totalled about 1.7 million metric tons, Leo Zussino, Gladstone Port Corp. chief executive officer, said yesterday . That compares with exports of about 2.5 million tons in the last two weeks of December, he said.
“We’ve had in January a significant softening of exports of metallurgical coal,” Zussino said. “There is a great deal of uncertainty and that’s to some extent being created by the commencement of price negotiations for metallurgical coal.”
The port shipped 54 million tons of coal last fiscal year but Mr Zussino said it may miss its 2009 fiscal year budget of 62 million tons by as much as 4 million tons on rail constraints and a demand slump.
Source: Bloomberg
Shipments in the first two weeks of January totalled about 1.7 million metric tons, Leo Zussino, Gladstone Port Corp. chief executive officer, said yesterday . That compares with exports of about 2.5 million tons in the last two weeks of December, he said.
“We’ve had in January a significant softening of exports of metallurgical coal,” Zussino said. “There is a great deal of uncertainty and that’s to some extent being created by the commencement of price negotiations for metallurgical coal.”
The port shipped 54 million tons of coal last fiscal year but Mr Zussino said it may miss its 2009 fiscal year budget of 62 million tons by as much as 4 million tons on rail constraints and a demand slump.
Source: Bloomberg
Wednesday, January 14, 2009
First Iron Ore, Now Coke - Asian Steel Mills Squeezing Prices
Asian steelmakers are lobbying for global metallurgical coal prices at a third the price in fiscal 2009 as they were in fiscal 2008, when they were a record $300 per metric ton. JFE, Japan’s second-largest steel firm expects prices of coking coal -used to add carbon in iron smelting - to fall back “at least to 2007 levels of $98 per metric tonne.” There are published reports from some analysts suggesting that the trendsetters in Asia are angling for contracts as low as $85 a metric ton.
The benchmark coking coal contracts are set between BHP Billiton of Australia and Japanese and South Korean customers and run until March each year. Chinese mills already are lobbying to change the contracts retroactive to January 1. In North America, most steelmakers settle with their local suppliers on a calendar-year basis.
The 2008 record settlement was driven by high demand for coking coal with global steel production at historically high levels, combined with tight supply conditions. None of those conditions exist in early 2009; in fact, the market now is characterized by a collapse in steel demand and no significant coal (or iron ore) supply disruptions.
However, analyst Jim Lennon at Macquarie Group in London says the consensus market forecast is around $140/metric ton, noting in a report this week that “recent spot deals have been done in the traded market at around that price.” He also notes that Australian coal producers appear reluctant to either move the contracts back to January or settle for anything much below the $150/metric ton price of spot sales in China.
He says he “has been surprised by how stubbornly prices have held to these levels, expecting shipment deferrals and rising stocks to drive spot prices lower. In fact, to this point, Australian suppliers appear to have avoided distressed sales. The question now is whether prices can hold on to these levels for benchmark contract settlements.”
Source: Purchasing.com
The benchmark coking coal contracts are set between BHP Billiton of Australia and Japanese and South Korean customers and run until March each year. Chinese mills already are lobbying to change the contracts retroactive to January 1. In North America, most steelmakers settle with their local suppliers on a calendar-year basis.
The 2008 record settlement was driven by high demand for coking coal with global steel production at historically high levels, combined with tight supply conditions. None of those conditions exist in early 2009; in fact, the market now is characterized by a collapse in steel demand and no significant coal (or iron ore) supply disruptions.
However, analyst Jim Lennon at Macquarie Group in London says the consensus market forecast is around $140/metric ton, noting in a report this week that “recent spot deals have been done in the traded market at around that price.” He also notes that Australian coal producers appear reluctant to either move the contracts back to January or settle for anything much below the $150/metric ton price of spot sales in China.
He says he “has been surprised by how stubbornly prices have held to these levels, expecting shipment deferrals and rising stocks to drive spot prices lower. In fact, to this point, Australian suppliers appear to have avoided distressed sales. The question now is whether prices can hold on to these levels for benchmark contract settlements.”
Source: Purchasing.com
Thursday, January 8, 2009
JFE Looks For Iron Ore Prices To Fall To 2007 Levels
Mr Hajime Bada, the president of the world's third-largest steelmaker, JFE Steel, Hajime Bada, says the Japanese company wants prices of iron ore and coking coal in the fiscal year of 2009 to fall to at least fiscal 2007 levels due to the precipitous world decline in steel demand. According to reporters at a reception for the Japan Iron and Steel Federation “the fiscal 2007 levels, that's the minimum for us.”
Iron-ore prices have nearly tripled this business year, ending March 31, amid tight supply, but demand for steel has fallen sharply since late last year due to the downturn in the global economy. In a new report, the Fitch Ratings credit-rating agency says that “contract prices for iron ore and metallurgical coal are expected to be 20%−40% lower than the $77/metric ton contract price settled by Companhia Vale do Rio Doce (Vale of Brazil) or the $94/metric tons contract price settled by Rio Tinto (of Australia) last year.”
Major steelmakers in China and Japan (the users of 53% of seaborne iron ore and coking coal) and their suppliers typically set the fiscal-year prices that are charged to smaller steel firms throughout Asia and India. These prices aren’t the same but do set the trends for North American and European import prices of iron ore and metallurgical coal.
Source: Purchasing.com
Iron-ore prices have nearly tripled this business year, ending March 31, amid tight supply, but demand for steel has fallen sharply since late last year due to the downturn in the global economy. In a new report, the Fitch Ratings credit-rating agency says that “contract prices for iron ore and metallurgical coal are expected to be 20%−40% lower than the $77/metric ton contract price settled by Companhia Vale do Rio Doce (Vale of Brazil) or the $94/metric tons contract price settled by Rio Tinto (of Australia) last year.”
Major steelmakers in China and Japan (the users of 53% of seaborne iron ore and coking coal) and their suppliers typically set the fiscal-year prices that are charged to smaller steel firms throughout Asia and India. These prices aren’t the same but do set the trends for North American and European import prices of iron ore and metallurgical coal.
Source: Purchasing.com
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