new jennings report New jennings report out with price at $3 down from $4. They assume 1.4M tonnes in 2012 at a price of 125 short tonnes after 20% discount to penetrate markets and another 10% discount for quality. Showing a loss for 2012.
Some extracts below - its worth a read - goto jennings website and join for free
Pricing – The current spot price for the releva nt benchmark (Energy Publishing’s Coking Coal
Hampton Roads Index, CCH-HIGH) is approximately US$190/metric tonne. For FY 2012, we then
apply a 20% discount to reflect the need to price the product aggressively in order to achieve market
penetration with customers. We also continue to apply an approximate 10% discount for ash content,
and a small premium for sulphur. Once converted to short tons, this implies a per ton realized price of
US$125 in FY 2012. We assume the benchmark price improves to US$195/metric tonne in FY 2013,
and to US$200/metric tonne in FY 2014, with that being our long-term price assumption. With the
assumed removal of the 20% discount for mark et penetration in FY 2013, but maintaining the
discount for ash and small premium for sulphur, we are assuming realized prices per short ton of
US$164 and US$168 in FY 2013, and FY 2014 (and beyond), respectively.
• OPEX – For FY 2012, we assume a blended cost/short ton of US$111, which declines with scale
economies and efficiency improvement to US$67 /ton in FY 2014, and for the remainder of our
forecast period. Our long-term cost assumption includes an approximate 10% buffer relative to the
estimate from the last NI 43-101 (dated May 20, 2011) of US$56/ton.
• Transportation – We are now using US$44/short ton throughout our forecast period, which is an
approximate 20% premium to the $35/short ton assumed in the last technical report.