Proposed China ban on low CV coal imports 'catastrophic' for Indonesian prices
Manila (Platts)--23May2013/518 am EDT/918 GMT
China's proposed ban on imports of low calorific value thermal coal will have a serious impact on Indonesian sub-bituminous coal prices, industry sources said Thursday.
Platts, quoting well-informed sources, reported this week that Beijing may impose the ban on imports of thermal coal with a calorific value of less than 4,540 kcal/kg on a net-as-received basis, and on thermal coal with a sulfur and ash content of more than 1% and 25%, respectively, as early as next week.
"If implemented, it will be catastrophic for prices of Indonesian low rank coal," a mid-sized Indonesian coal producer said.
A Singapore-based coal trader said he believes that if the ban is immediately imposed Indonesian sub-bituminous coal prices will drop by at least $5/mt "considering the volume of low rank coal exported to China at the moment."
ncrease has led to plans to export the fuel, with Wood Mackenzie predicting exports of 50 million tonnes of liquefied natural gas (LNG) by 2020.
Such exports are widely expected to boost U.S. domestic gas prices, but it is still unclear how much they will rise.
"Our analysis shows if U.S. gas prices come to around $5 mmBtu - it is about $4.30 per mmBtu now - we may well see coal come back," Fatih Birol, chief economist of the International Energy Agency, told reporters at an industry conference.
Only regulatory intervention to bar a switch back to coal could prevent greater coal use if gas prices rise to $5 per mmBtu, Birol said.
"If it is left only to economics, around $5 we may see a (coal) comeback, which would definitely be a development which would catch many people by surprise," Birol said.
Nice profits. What I mean by saying "dead money" b/c it won't move up much like other stock, It's slowly gain.
I'm still holding on those losses lot of USLV and DGAZ. But I traded a long USLV and DGAZ, so all the lost made up. So, if DGAZ go back to $15.59 then I make money.
I should have bought TSL under $4, oh well. If I know I would be rich already.