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Thermal coal prices at Australia's Newcastle port fell US$6.79 to US$188.00 a ton in the week ended Jul 11.
Straits Asia continuing to fall. Other coal stocks likely to fall too.
The Shanghai Securities News reported that the government will delay the introduction of higher taxes on coal and other resources. A proposed tax increase submitted to China's State Council has yet to receive approval on concern about inflation, the Shanghai Securities News reported today. The tax increase won't be introduced in the next 3 months, the newspaper said.
Regulatory risk for Indonesian coal producers has increased since thermal coal prices hit US$172/ton 2 weeks ago, with government considering allocating more coal domestically, UBS says in report.
"We think the government will implement a Domestic Market Obligation (DMO) policy in order to meet increased domestic coal demand. This is likely to require producers to allocate 30%-35% of production domestically at below market prices. This could create near-term earnings risk and short-term share price weakness."
Notes, however, potentially positive outcomes: Indonesian coal consumption growth to pressure supply and export prices (65%-70% of volume sales). Adds, higher domestic volume allocations could mean lower royalties, currently 13.5% of sales, boding well for earnings.
but Jade not agitated leh??
Power-plant coal prices at Australia's Newcastle port jumped to a record in the week ended Jun 6. The weekly index for the fuel at the port rose US$6.83, or 4.5%, to US$158.53 a ton.
Indonesian state coal miner PT Bukit Asam Tbk expects its coal export prices to rise by at least 45% this year, in line with rising global prices and strong demand, a company official said on 29/5.
Bukit Asam -- the smallest of Indonesia's 3 listed coal miners -- sold coal in the overseas market at an average US$47.5 a tonne in '07, Nurtimah Tobing, Bukit Asam's investor relation officer, told Reuters.
"We expect coal prices for export to rise by at least 45% because global prices continue to gain," Tobing said. "But it may be higher as some of our coal has not been contracted."
Australian thermal coal prices, a benchmark for Asia, topped US$151.70 a tonne in the latest week, extending a 4-week rally that was spurred by strong global demand amid high oil prices.
Bukit Asam, which has a market value of US$2.9 b, plans to sell 13 m tonnes of coal this year with about 10.5 m tonnes supplied from its own production.It will buy the rest from small coal miners in Kalimantan island. The company sold 10.85 m tonnes of coal in '07.
Indonesia is the world's largest thermal coal exporter and miners in the country have been performing well due to high coal prices, strong demand from China and India, and supply constraints in Australia.
The company has sold 1.1 m tonnes of coal to Bukit Asam power plant in Sumatra at 325,000 rupiah (US$34.85) a tonne this year, Tobing said.
It has also sold 800,000 tonnes of coal to Tarahan power plant in Lampung on Sumatra island at 436,500 rupiah a tonne. Last week, the company said it has signed deals to supply Suralaya power plant in West Java at US$58.53 a tonne for Jun-Dec this year. Bukit Asam has agreed to supply Suralaya with 5.1 m tonnes of coal this year.