Citigroup 花旗：全球大宗商品期货交易策略(金属矿业) 

26 October 2007 21 pages

Commodity Heap

Thermal Coal: Upside Is Obvious, But China Concerns

 

 Positives Already Prominent — Spot thermal coal prices (currently US$76/t at
Newcastle) are at record levels. Robust power consumption in Japan as well as
China, coupled with well documented supply constraints are driving spot prices
sharply higher.
 China's A Concern — China's massive coal industry returned to a net exporter of
thermal coal last month after spending much of the year as a net importer
(including Vietnam's ~2Mt of anthracite imports). Chinese producers have been
increasing exports to seaborne markets as an arbitrage over domestic prices
(Figure 28).
 The More Negligible Negatives — Indonesia's proposed removal of it 10% VAT on
coal could see increased seaborne exports. However a recent visit to Indonesia
confirmed higher quality export coal volumes are largely committed. Newcastle
also increased its exports over the last week to theoretical operating capacity.
 Negotiations — Current negotiations focused on smaller volume October-
September contacts appear stalled with producers asking $US78/t and Japanese
Utilities offering below $70.
 Risks Remain on the Upside — With spot prices running producers are well placed
for the more significant negotiations for JFY2008. We expect JFY2008 contracts
to be set at US$67/t (US$55/t currently)