Post by
no1coalking on Feb 07, 2008 12:54pm
Coal Expansion:
COAL: Largest U.S. terminal to expand export capacity (02/07/2008)
Lamberts Point, the largest U.S. coal terminal, is expanding staff and operations to raise export capacity to 20 million tons this year, up from 13 million last year, said Mark Bower, an assistant vice president at Norfolk Southern Corp., which operates the Virginia port.
The move comes at a time when demand for U.S. coal has risen due to delivery problems in South Africa, Australia and Indonesia.
European buyers have expressed doubts about U.S. capacity to deliver and, at the Coaltrans Americas conference in Miami last week, analysts said that a lack of American port capacity could create a bottleneck.
Lamberts Point exports were almost entirely metallurgical coal in 2007, but 2008 exports in steam coal, responding to soaring demand from European power plants, could reach 1 million tons, said industry sources (Bruce Nichols, Reuters, Feb. 6).
Coal prices may double in coming year
The annual contract price for thermal coal will reach $100 per metric ton in the 2008-2009 financial year, up from $55 per ton now, and the annual contract price of coking coal in 2008-2009 will rise from its current $95 per ton to $200, according to forecasts by Citigroup.
Floods in Australia, the biggest snowstorm in China in 50 years and power shutdowns at mines in South Africa have disrupted production and export, tightening supply at a time when demand is expanding. The disruptions revealed deeper problems, including deficiencies in China's export infrastructure and in South Africa's electrical infrastructure, that will continue to affect supply until at least 2012-2013.
Production costs for coal have been rising 14 percent per year and are expected to continue rising, if at a slower rate.
Citigroup predicts thermal coal prices will recede in 2010 from their 2008-2009 spikes as port and rail bottlenecks are removed in Australia. Citigroup expects prices of coking coal will remain high and, in the long term, rise to $120 per ton, as it is difficult to identify new sources of supply (Vivian Wai-yin Kwok, Forbes Feb 6). -- PR