Chinese coal prices up by 2pct

China's raw coal prices edged up further last week, buoyed up by increased demand from coal consumers for winter use, the Ministry of Commerce was cited as saying.

The demand for the fuel has escalated as coal consumers try to stockpile ahead of a frosty winter. Power plants in South China also accelerated purchasing activity, which gave another push for the price hike. The price of lignite, soft coal and anthracite was up by 2.8%, 1.5% and 1.3% respectively.

Industry sources reported that the price of thermal coal produced in Shanxi province increased by 2.1% at Qinhuangdao port on October 14 compared with a week earlier.

Bohai-Rim Steam-Coal Price Index, or BSPI gained by CNY 10 to CNY 842 compared with the previous week. The weekly gauge tracks power-station coal prices at six major Chinese ports.

(Source: www.steelhome.cn/en)
China steel information centre and industry database

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Zimbabwe Hwange Colliery plans to ship coal through Maputo

Bloomberg cited Mr Oliver Maponga Business Development Manager as saying that Hwange Colliery Ltd Zimbabwe largest coal miner plans to ship 30,000 to 50,000 tonnes of coal a month through Mozambique’s port of Maputo.

Mr Maponga said Hwange is in talks with port authorities after starting to use Mozambique central Beira port last year. The company which produces 400,000 tons of coal a month is studying markets in India China and Western Europe.

(Sourced from Reuters)

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Why Baltic index edging higher

Reuters reported that the Baltic Exchange main sea freight index which tracks rates to ship dry commodities inched higher recently although a potential pullback in Chinese iron ore imports would put the put the brakes on a recent rally in the larger capsize market.

Brokers said the market was watching to see if weaker than expected Chinese economic data issued on Tuesday would signal a pullback in raw materials demand which would dent the dry freight market already struggling with a glut of vessels. The overall index rose 4 points to 2,140 points.

Mr Erik Nikolai Staveseth Arctic Securities analyst said "We still think rates in the Capesize segment will remain firm going forward. Imported iron ore prices are on the decline and rapidly coming in competition with lower grade domestic ore which will shift the pendulum towards imports."

Mr Jeffrey Landsberg managing director of dry bulk consultancy Commodore Research said a fall in Chinese s
eel prices this week could put pressure on Capesize rates. He said that "If prices continue to decrease and stockpiles stay high, near term Chinese steel production would remain likely to suffer a decline."

He added that "In addition, Chinese iron ore production has remained robust which is putting pressure on global iron ore prices and Chinese iron ore fixture volumes this week."

The recent dry freight market rally had been driven by firmer coal and iron exports from Australia and Brazil to China which boosted the larger Capesize market. Coal imports into Japan have also picked up. Manufacturing in Australia had been disrupted earlier this year by floods while Japanese industrial raw materials import demand had been affected by an earthquake in March that crippled a nuclear plant and threw Japan economy into disarray.

In August, the overall index which gauges the cost of shipping commodities including iron ore, coal and grain dropped to its lowest in more than three months after falling for 18 consecutive sessions. It has remained erratic and is still over 20% down from the same period last year.

(Sourced from Reuters)

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S Korea WP seeks 260000 tonnes coal for Nov to Dec

Reuters quoted the utility said Korea Western Power Co Ltd is seeking 260,000 tonnes of bituminous coal for arrival between November 15 and December 15 through a spot tender.

The utility said the tender for NCV minimum 5,600 kilocalories per kilogram bituminous coal supply to Taean Power Plant will close at 2 PM on October 20.

(Sourced from Reuters)

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African Minerals to ship iron ore from Tonkolili mine in Sierra Leone by end October

Reuters quoted the London listed metals explorer and developer said African Minerals Ltd will start exporting iron ore cargoes to China and Europe from its Tonkolili mine in Sierra Leone at the end of this month.

The company commenced mining iron ore in Sierra Leone in December 2010 and has since stockpiled material. Iron ore exports will start this month and African Minerals expects to export about 1.2 million tonnes of iron ore during the current fourth quarter.

Mr David Tucker its head of sales and marketing said "We have three cargoes programmed for China and one cargo programmed for Europe. He said that we are selling some trial cargoes, but really the intention is from those trial cargoes to cement long-term off-take agreements with partners."

He said that African Minerals is currently in talks with European Chinese and Asian steelmakers to sign more off take agreements. He added that we are not tied to a specific index but our initial contracts reference the Platts index."

He also said "We are talking about something which is linked to the China CFR price, but the actual pricing mechanism is a bit of secondary importance to us."

Shandong Iron & Steel, the world ninth largest steel group has already agreed to pay USD 1.5 billion for a 25% stake in African Minerals' flagship iron ore project and will take 25% of its production. Mr Mike Jones head of corporate development and investor relations said to go ahead, the deal still requires Chinese government approval, which is expected by December 31.

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