Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Commodities Comment
No avoiding a met market undersupply
As with any situation of recovery, predicting the gradient of getting
Queensland coal operations back to normal levels remains difficult, however
quite simply there is not enough slack in the met coal supply chain to cover
the losses being incurred. With this, the seaborne met coal market is being
undersupplied week after week, with risks of deficits being amplified by
rampant Chinese steel output and strengthening La Nina conditions.
Latest news
The major base metals sold off heavily today as the market again feared that
Chinese New Year would be accompanied by weaker demand conditions and
a further rise in interest rates. Copper fell 2.3% on the day to $4.25/lb.
The iron ore market showed contrasting fortunes today between the physical
and financial markets. The Steel Index 62%Fe assessment CFR China rose
1.5% on the day to $185.4/t, an all-time high, while the SGX iron ore swaps
forward curve fell 3.7% for Q2 amid speculation that the Supreme Court of
India would overturn the Karnataka state ore ban in February. In our view,
even if the Court ruling is positive, it does not mean that exports will be
restored immediately as the Karnataka state government has further
administrative measures which could impede iron ore shipments. We would
reiterate that the sentiment of small Chinese steel mills is much more
important to spot price direction at the present time.
According to the NBS aluminium production data, Chinese aluminium output
fell to 14.27mt annualised in December, from 14.33mt in November. We
expect output to be similar in January, and is in line with our view that the
Chinese aluminium market will be very tight in at least 1Q11.
According to New Caledonian government data, total New Caledonia nickel
ore production reached 129,900t of nickel contained in 2010, up 39.9%
YoY. Production of limonite ore (for export to QNI in Australia) rose 80.6%
YoY to 26,200t, while production of saprolite ores rose 32.4% YoY to
103,700t. Exports of saprolite ores were up flat YoY at 36,800t Ni, while Vale
New Caledonia produced only 146t of nickel in intermediate nickel (for export
to QNI in Australia) in December, bringing total 2010 production to only 221t.
Chinese economic data for December were strong. GDP rose by 9.8%YoY in
Q4, to rise by 10.3% for the year as a whole. Industrial production was up
13.5%YoY in the month, although power generation was fairly weak, rising
5.1% YoY in December. Thermal generation was flat YoY, as it has been for
much of Q4. CPI grew at 4.6%YoY in the month of December and 3.3% for
the year as a whole, with strong growth and high inflation raising some
concerns that policy will be tightened further.
The Indonesian government has announced that it aims to introduce a law
forcing coal producers to lift the energy content of coal to a minimum of 5,600
kcal/kg GAD in 2014. Low CV exports have grown very strongly in the past
18 months, with various countries showing greater interest in lower-CV, low
ash coal for blending. This is unlikely to impact the market in the near term,
with the technology required to upgrade coal not commercially viable on a
large scale, although this may have an impact in the medium term for those
consumers planning on utilising low CV, which has been relatively abundant
in the last few years.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Commodities Comment
No avoiding a met market undersupply
As with any situation of recovery, predicting the gradient of getting
Queensland coal operations back to normal levels remains difficult, however
quite simply there is not enough slack in the met coal supply chain to cover
the losses being incurred. With this, the seaborne met coal market is being
undersupplied week after week, with risks of deficits being amplified by
rampant Chinese steel output and strengthening La Nina conditions.
Latest news
The major base metals sold off heavily today as the market again feared that
Chinese New Year would be accompanied by weaker demand conditions and
a further rise in interest rates. Copper fell 2.3% on the day to $4.25/lb.
The iron ore market showed contrasting fortunes today between the physical
and financial markets. The Steel Index 62%Fe assessment CFR China rose
1.5% on the day to $185.4/t, an all-time high, while the SGX iron ore swaps
forward curve fell 3.7% for Q2 amid speculation that the Supreme Court of
India would overturn the Karnataka state ore ban in February. In our view,
even if the Court ruling is positive, it does not mean that exports will be
restored immediately as the Karnataka state government has further
administrative measures which could impede iron ore shipments. We would
reiterate that the sentiment of small Chinese steel mills is much more
important to spot price direction at the present time.
According to the NBS aluminium production data, Chinese aluminium output
fell to 14.27mt annualised in December, from 14.33mt in November. We
expect output to be similar in January, and is in line with our view that the
Chinese aluminium market will be very tight in at least 1Q11.
According to New Caledonian government data, total New Caledonia nickel
ore production reached 129,900t of nickel contained in 2010, up 39.9%
YoY. Production of limonite ore (for export to QNI in Australia) rose 80.6%
YoY to 26,200t, while production of saprolite ores rose 32.4% YoY to
103,700t. Exports of saprolite ores were up flat YoY at 36,800t Ni, while Vale
New Caledonia produced only 146t of nickel in intermediate nickel (for export
to QNI in Australia) in December, bringing total 2010 production to only 221t.
Chinese economic data for December were strong. GDP rose by 9.8%YoY in
Q4, to rise by 10.3% for the year as a whole. Industrial production was up
13.5%YoY in the month, although power generation was fairly weak, rising
5.1% YoY in December. Thermal generation was flat YoY, as it has been for
much of Q4. CPI grew at 4.6%YoY in the month of December and 3.3% for
the year as a whole, with strong growth and high inflation raising some
concerns that policy will be tightened further.
The Indonesian government has announced that it aims to introduce a law
forcing coal producers to lift the energy content of coal to a minimum of 5,600
kcal/kg GAD in 2014. Low CV exports have grown very strongly in the past
18 months, with various countries showing greater interest in lower-CV, low
ash coal for blending. This is unlikely to impact the market in the near term,
with the technology required to upgrade coal not commercially viable on a
large scale, although this may have an impact in the medium term for those
consumers planning on utilising low CV, which has been relatively abundant
in the last few years.
No comments:
Post a Comment