Nuclear energy was the main focus in alternative energy markets last week, as the spot uranium price moved up sharply. The main news turning the market bullish was that the Belgian government has put back its plans to phase out nuclear power by ten years, although the country's nuclear energy producers will have to pay for the privilege of continued operation. The U308 price published last week by UX Consulting was up US$2.50 a pound at US$46.50.
The Belgian Council of Ministers' decision follows on from recent recommendations from a specially founded expert group, and was set out in an announcement published by climate and energy minister Paul Magnette. A new nuclear agreement now stipulates that the country's nuclear producers make an annual 'contribution' to the country's budget.
Meanwhile, over in the UK, in its first annual progress report to parliament, the independent Committee on Climate Change (CCC) has said that the country must construct up to three new nuclear power plants by 2022 if it is to meet its greenhouse gas emission reduction targets.
Under current new build replacement plans the first new reactor would start up before the end of 2017 and the next follow in mid-2019. No other build projects are as firmly slated as those from EdF Energy, although other consortia, such as one by RWE and EOn, are working towards new-build in a similar timeframe.
Another bullish factor for the uranium price was the announcement of flat production figures this year from Energy Resources of Australia, producer of about a tenth of the world’s mined uranium. It expects that 2009 output will be similar to the previous two years. Third-quarter production increased four per cent to 1,405 metric tons, or 3.1 million pounds, from 1,349 tons a year earlier, the Darwin-based company said a statement. The company, controlled by Rio Tinto Group, says it will be expanding output at its Ranger mine in Northern Territory on indications of rising demand from power utilities. Energy Resources shares have climbed 40 percent in Sydney in 2009, compared with a gain of 30 per cent for the S&P/ASX 200 Index. The shares currently trade at around A$26.57 in Sydney.
Elsewhere in the sector Areva of France, the world’s biggest builder of nuclear reactors, announced that it is to build a new fuel-processing plant in Japan to more than double that country’s domestic capacity to meet anticipated demand growth. The plan is part of a joint venture with Mitsubishi and Mitsubishi Heavy Industries, in which the French giant holds 30 per cent. Japan plans 12 new reactors to be built by 2019, as it increases nuclear dependence from 25 per cent in 2008 to at least 40 per cent by 2030, as part of efforts to reduce pollution blamed for global warming and to cut dependence on oil. Areva wants a bigger share of an estimated US$1.5 billion of revenues in this market.
In the solar space, German industrial conglomerate Siemens agreed to buy Israel's Solel Solar Systems for US$418 million. Siemens said it expects its acquisition of Solel, which is majority-owned by London-based investment company Ecofin, to close by the end of 2009. The acquisition marks the latest step by an industrial giant to tap into the growing renewable energy market, which is benefiting from the big push by governments to diversify energy sources and reduce dependency on gas and oil.
Germany's Robert Bosch, the world's largest supplier of automotive parts, last year bought Ersol, now renamed Bosch Solar Energy, for more than US$1.49 billion. This year it acquired solar module maker Aleo Solar. And German solar thermal company Solar Millennium and plant builder MAN Ferrostaal have joined forces to pursue a similar strategy, planning to create a solar thermal power company in the United States.
Meanwhile, shares in LDK Solar, the Chinese manufacturer for the solar power industry, fell four per cent on the abrupt resignation of its head of manufacturing. Nicola Sarno was in charge of getting an LDK's plant up and running with a view to the company making its own polysilicon instead of buying it from other producers. Sarno's sudden departure "casts doubt on the success of the plant, which, in our view, is LDK's only saving grace", Oppenheimer & Co said in a note to clients. In its view LDK Solar needed the plant to work since prices for its other business - wafers for the solar power industry - are falling and interest costs have cut into earnings. LDK Solar's shares were down 3.2 per cent, or 27 US cents, at US$8.08 in New York Stock.
In Europe carbon allowance contract prices slipped back, down €0.11 at €1.10 for December 2009.
US ethanol futures posted moderate to sharp losses, following pressure from a strong reversal in the corn futures market. Corn prices dropped as much as 10 per cent mid-week. November ethanol futures traded at US$1.856 per gallon, after a 2.6 cent loss. The premium for ethanol compared to gasoline is now a thing of the past, with the current price shift placing ethanol nearly 10 cents lower than gasoline. This was the first time in several weeks that ethanol was not held at a premium to the gasoline market.
Ethanol plant profitability levels increased sharply. Overall strong demand for ethanol around the country was keeping Midwestern states price levels moving moderately higher. The Neeley Biofuels index during last week showed a net gain of 11.5 cents per gallon of ethanol produced.
Read More..
Sabtu, 17 Oktober 2009
Rabu, 14 Oktober 2009
Helius Energy Is Working To Build Up Its Biomass-Fired Generating Capacity
Aim-listed Helius Energy is a UK-based developer of biomass-fired generators which use waste or by-products to generate electricity. In 2009, Helius pre-sold its first development - a 65MW plant in Stallingborough, north east England - to German utility group RWE for £28 million plus 13 per cent of the profits for the next 24 years. The plant will cost RWE £240 million to build and Helius will be involved in the construction and start up phases. The deal underpins the company’s business model and bodes well for a smooth transition from a development model to an operational one.
Management is focused on consolidating the success of Stallingborough and keeping up momentum. Recent appointees to the board have experience of both construction and electricity generation. Dr Adrian Bowles has been appointed as the new chief executive to replace John Seed who took the company from foundation through to the sale of Stallingborough. Dr Bowles, who has himself been on the board since inception, is a chartered energy engineer with a specialisation in renewable energy project development and implementation. Keith Henry, a former chief executive of National Power, has been appointed as non-executive chairman.
And Oliver Blundell, who formerly developed fuel supply chains at Cargill, has been appointed as feedstock director, underscoring the importance to the company of securing feedstock. There are growing concerns that pressure on supplies will push feedstock prices up. According to figures from New Energy Finance 2,172MW of biomass capacity is planned in the UK with a further 291MW actually commissioned, 209MW under construction and 610MW permitted. A plant the size of Stallingborough is expected to require 430,000 tonnes of biomass a year.
Helius has secured a site for a 100MW biomass plant at Avonmouth on the Bristol Channel. The project has support from all stakeholders and is currently with the Department of Energy and Climate Change for Section 36 approval. Feedstock contracts are being progressed, construction contracts are being negotiated and the grid connection is secured. Management is in discussions regarding debt and equity.
The company is also working on smaller projects and has formed a joint venture to build a 7.2MW million biomass combined heat and power (CHP) generation plant in Scotland. The £50 million plant will be built at the Combination of Rothes Distillers (CoRD) which will use 2MW of the power generated and export the rest to the grid to power 9,000 homes. The feedstock will be from co-products such as draff and pot ale from the distillery and wood chip from sustainable sources. The draff and pot ale will be converted into biomass fuel, fertiliser and animal feed using Helius’ GreenFields technology which replaces the traditional, energy-intensive practice of drying draff and pot ale for use as animal feed. Construction is expected to begin early in 2010 and to last two years.
The company also has a strategic alliance with water and wastewater management company Veolia Water to use Helius’ technology to turn distillery by-products into organic fertiliser, animal feed and biomass fuel. There is potential for Helius to leverage this relationship and sell its GreenFields technology to Veolia’s customers.
When Alan Lyons, Helius’ finance director addressed fund managers at a Matrix Corporate Capital conference in London this month he stressed that biomass plants are likely to play a key role if the UK is to meet its renewable energy targets. Helius is well positioned: it has £24 million in cash and has demonstrated its ability to take a project through to utility standards.
The challenge now is to replicate the success of Stallingborough and secure reliable feedstock supplies. Matrix includes Helius in its top stock picks and values the company at 60p a share compared with the current price of 30p. The company is gaining an institutional following but management still keeps company announcements to a minimum as it is keenly aware that they are monitored by those who seek to block planning permission.
Read More..
Management is focused on consolidating the success of Stallingborough and keeping up momentum. Recent appointees to the board have experience of both construction and electricity generation. Dr Adrian Bowles has been appointed as the new chief executive to replace John Seed who took the company from foundation through to the sale of Stallingborough. Dr Bowles, who has himself been on the board since inception, is a chartered energy engineer with a specialisation in renewable energy project development and implementation. Keith Henry, a former chief executive of National Power, has been appointed as non-executive chairman.
And Oliver Blundell, who formerly developed fuel supply chains at Cargill, has been appointed as feedstock director, underscoring the importance to the company of securing feedstock. There are growing concerns that pressure on supplies will push feedstock prices up. According to figures from New Energy Finance 2,172MW of biomass capacity is planned in the UK with a further 291MW actually commissioned, 209MW under construction and 610MW permitted. A plant the size of Stallingborough is expected to require 430,000 tonnes of biomass a year.
Helius has secured a site for a 100MW biomass plant at Avonmouth on the Bristol Channel. The project has support from all stakeholders and is currently with the Department of Energy and Climate Change for Section 36 approval. Feedstock contracts are being progressed, construction contracts are being negotiated and the grid connection is secured. Management is in discussions regarding debt and equity.
The company is also working on smaller projects and has formed a joint venture to build a 7.2MW million biomass combined heat and power (CHP) generation plant in Scotland. The £50 million plant will be built at the Combination of Rothes Distillers (CoRD) which will use 2MW of the power generated and export the rest to the grid to power 9,000 homes. The feedstock will be from co-products such as draff and pot ale from the distillery and wood chip from sustainable sources. The draff and pot ale will be converted into biomass fuel, fertiliser and animal feed using Helius’ GreenFields technology which replaces the traditional, energy-intensive practice of drying draff and pot ale for use as animal feed. Construction is expected to begin early in 2010 and to last two years.
The company also has a strategic alliance with water and wastewater management company Veolia Water to use Helius’ technology to turn distillery by-products into organic fertiliser, animal feed and biomass fuel. There is potential for Helius to leverage this relationship and sell its GreenFields technology to Veolia’s customers.
When Alan Lyons, Helius’ finance director addressed fund managers at a Matrix Corporate Capital conference in London this month he stressed that biomass plants are likely to play a key role if the UK is to meet its renewable energy targets. Helius is well positioned: it has £24 million in cash and has demonstrated its ability to take a project through to utility standards.
The challenge now is to replicate the success of Stallingborough and secure reliable feedstock supplies. Matrix includes Helius in its top stock picks and values the company at 60p a share compared with the current price of 30p. The company is gaining an institutional following but management still keeps company announcements to a minimum as it is keenly aware that they are monitored by those who seek to block planning permission.
Read More..
Minggu, 21 Juni 2009
Glencore To Float, And China Backs Solar
For a change in alternative power it was the turn of equity markets to dominate the action. Among major news for investors interested in commodities was news that Glencore International AG, the world’s largest commodity trader, plans a major equity float. While the employee-owned group’s profile is highest in the metals, it also has a massive presence in grains, energy, rice and sugar, a presence that runs across western and eastern Europe, Asia and South America. The Swiss-based company has already held initial talks with bankers about a share sale, according to reports last week.
Glencore ignominiously had its credit rating cut to the lowest investment grade by Standard & Poor’s in December, as metals prices and demand plunged. After more than three decades operating as a highly secretive and closely held partnership, the Swiss company has now begun issuing increasingly detailed quarterly reports. Newspaper reports suggested that listing on stock exchanges could open up new sources for capital. The cost of insuring Glencore against a default on its debt spiked 16-fold in the three months from September 2008, on market speculation over its liquidity.
Meanwhile alternative energy was also talking big money. According to reports, Beijing is bidding to boost its solar energy sector, seeking more than US$10 billion in private funding for projects. This is aimed at putting China on track to become a leading market for solar equipment within three years. Shares of US-listed Chinese solar groups such as Suntech Power Holdings, the world's biggest crystalline solar panel-maker, have been rising on expectations that China will soon unveil more cash incentives to develop solar energy.
China, the world's top greenhouse gas polluter, is trying to catch up in a global race to find alternatives to fossil fuels. Any cash perks for the sector will help drive demand for solar energy systems and create bigger businesses for companies involved in the entire solar supply chain, according to Julia Wu, an analyst with research firm New Energy Finance. Top panel-makers including Trina Solar, Yingli Green Energy Holding and JA Solar are expected to benefit, while solar wafer-makers such as LDK Solar could gain from related business opportunities. "China could potentially be the top market for solar. Companies up and down the supply chain should benefit," said Wu.
Beijing is considering enhancing cash incentives at a time when European states, including Germany, one of the largest solar markets, are pulling back on spending, resulting in slower industry growth. Nearly 10 years of subsidized prices have made Germany among the largest markets for photovoltaic panels, and have given rise to such solar giants as Q-Cells AG and Conergy.
Although China supplies half the world's solar panels, it contributes very little to demand, as the cost of tapping solar energy to generate electricity remains steep. Investors have found that there’s little economic sense in pursuing solar projects in China, where incentives are few. Now China's government says it will offer to pay around US$2.90 per watt of solar systems fixed to roofs, and which have a capacity of more than 50 kilowatt peak. The subsidy, which could cover half the cost of installing the system, is proving popular among developers, attracting so far applications equivalent to the building of 1 gigawatt of solar power. That’s roughly enough electricity to power a million homes.
German group Q-Cells gave a clear illustration last week of the difficulties facing European companies in the sector. Shares in Q-Cells fell by 8.5 per cent, making them the top decliner among German tech stocks, after the announcement that chief financial officer Hartmut Schuening will leave the company earlier than planned. Frankfurt traders pointed out that the company had cut sales guidance three times this year as financing for renewable energy projects has dried up.
Another casualty has been Norwegian solar panel maker Renewable Energy, which last week announced a major equity and debt issue as well as a debt restructuring. The group said that it hoped to raise between US$1 billion and US$1.4 billion in new money, with up to US$0.5 billion coming from a rights issue. On the news the shares rose by Nk2.0 to Nk58.50, against the year’s range of Nk41-Nk73. Chinese coal trader China Qinfa Group is another planning to raise money in the equity markets, with a US$81 million issue in Hong Kong. The Chinese coal trader plans to kick off its public offering on Friday with trading in its shares expected to begin on July 3rd.
The Chinese coal market continues to firm. China Shenhua Energy, China’s top coal producer, expects Japanese and South Korean clients to pay at least as much as Chinese customers for this year’s annual contract prices, according to board secretary Huang Qing. However, he denied rumours that the price would be around US$79, whilst at the same time refusing to indicate a level. The firm plans to invest more than 400 billion yuan (US$58.53 billion) over the next decade in facilities to convert coal to oil, methanol and gas, the Xinhua news agency reported. Its’ target is to have the capacity to convert 100 million tonnes of coal into about 30 million tonnes of oil and chemical products by 2020.
In the US the major news was a bid for Foundation Coal by Alpha Natural Resources in an all-share deal worth US$1.5 billion. The deal would create the third-largest US coal producer. The market expects this to initiate a wave of consolidation in the fragmented sector. Both sides said the strategy behind the acquisition is to position the merged company to benefit from an expected rebound in coal demand, driven by steel makers and power plants. Foundation Coal’s stock rose US$4.39 or 18.9 per cent at US$27.63 on the New York Stock Exchange, although Alpha fell US$2.36 or about 8.2 per cent to US$26.50.
In commodity markets, activity in the spot uranium market slowed slightly. However, the spot uranium price continued to firm, with TradeTech’s Spot Price Indicator increasing US$2.00 to US$52.00 per pound of U3O8.
Prices in the yo-yoing grain markets, a major source of alternative energy feed stocks, were lower last week, as hopes rose for good harvests. By Friday on the Chicago Board of Trade, maize for delivery in July had fallen to US$3.94 a bushel from US$4.25 a week earlier. Wheat for July dropped to US$5.10 bushel from US$5.84.
Falling corn markets helped ease ethanol costs, with plant profitability showing a net improvement in the US for the first time in months. Rack ethanol prices fell moderately in many areas of the US, with the national average price slipping 0.66 cents per gallon to US$1.9716.
Read More..
Glencore ignominiously had its credit rating cut to the lowest investment grade by Standard & Poor’s in December, as metals prices and demand plunged. After more than three decades operating as a highly secretive and closely held partnership, the Swiss company has now begun issuing increasingly detailed quarterly reports. Newspaper reports suggested that listing on stock exchanges could open up new sources for capital. The cost of insuring Glencore against a default on its debt spiked 16-fold in the three months from September 2008, on market speculation over its liquidity.
Meanwhile alternative energy was also talking big money. According to reports, Beijing is bidding to boost its solar energy sector, seeking more than US$10 billion in private funding for projects. This is aimed at putting China on track to become a leading market for solar equipment within three years. Shares of US-listed Chinese solar groups such as Suntech Power Holdings, the world's biggest crystalline solar panel-maker, have been rising on expectations that China will soon unveil more cash incentives to develop solar energy.
China, the world's top greenhouse gas polluter, is trying to catch up in a global race to find alternatives to fossil fuels. Any cash perks for the sector will help drive demand for solar energy systems and create bigger businesses for companies involved in the entire solar supply chain, according to Julia Wu, an analyst with research firm New Energy Finance. Top panel-makers including Trina Solar, Yingli Green Energy Holding and JA Solar are expected to benefit, while solar wafer-makers such as LDK Solar could gain from related business opportunities. "China could potentially be the top market for solar. Companies up and down the supply chain should benefit," said Wu.
Beijing is considering enhancing cash incentives at a time when European states, including Germany, one of the largest solar markets, are pulling back on spending, resulting in slower industry growth. Nearly 10 years of subsidized prices have made Germany among the largest markets for photovoltaic panels, and have given rise to such solar giants as Q-Cells AG and Conergy.
Although China supplies half the world's solar panels, it contributes very little to demand, as the cost of tapping solar energy to generate electricity remains steep. Investors have found that there’s little economic sense in pursuing solar projects in China, where incentives are few. Now China's government says it will offer to pay around US$2.90 per watt of solar systems fixed to roofs, and which have a capacity of more than 50 kilowatt peak. The subsidy, which could cover half the cost of installing the system, is proving popular among developers, attracting so far applications equivalent to the building of 1 gigawatt of solar power. That’s roughly enough electricity to power a million homes.
German group Q-Cells gave a clear illustration last week of the difficulties facing European companies in the sector. Shares in Q-Cells fell by 8.5 per cent, making them the top decliner among German tech stocks, after the announcement that chief financial officer Hartmut Schuening will leave the company earlier than planned. Frankfurt traders pointed out that the company had cut sales guidance three times this year as financing for renewable energy projects has dried up.
Another casualty has been Norwegian solar panel maker Renewable Energy, which last week announced a major equity and debt issue as well as a debt restructuring. The group said that it hoped to raise between US$1 billion and US$1.4 billion in new money, with up to US$0.5 billion coming from a rights issue. On the news the shares rose by Nk2.0 to Nk58.50, against the year’s range of Nk41-Nk73. Chinese coal trader China Qinfa Group is another planning to raise money in the equity markets, with a US$81 million issue in Hong Kong. The Chinese coal trader plans to kick off its public offering on Friday with trading in its shares expected to begin on July 3rd.
The Chinese coal market continues to firm. China Shenhua Energy, China’s top coal producer, expects Japanese and South Korean clients to pay at least as much as Chinese customers for this year’s annual contract prices, according to board secretary Huang Qing. However, he denied rumours that the price would be around US$79, whilst at the same time refusing to indicate a level. The firm plans to invest more than 400 billion yuan (US$58.53 billion) over the next decade in facilities to convert coal to oil, methanol and gas, the Xinhua news agency reported. Its’ target is to have the capacity to convert 100 million tonnes of coal into about 30 million tonnes of oil and chemical products by 2020.
In the US the major news was a bid for Foundation Coal by Alpha Natural Resources in an all-share deal worth US$1.5 billion. The deal would create the third-largest US coal producer. The market expects this to initiate a wave of consolidation in the fragmented sector. Both sides said the strategy behind the acquisition is to position the merged company to benefit from an expected rebound in coal demand, driven by steel makers and power plants. Foundation Coal’s stock rose US$4.39 or 18.9 per cent at US$27.63 on the New York Stock Exchange, although Alpha fell US$2.36 or about 8.2 per cent to US$26.50.
In commodity markets, activity in the spot uranium market slowed slightly. However, the spot uranium price continued to firm, with TradeTech’s Spot Price Indicator increasing US$2.00 to US$52.00 per pound of U3O8.
Prices in the yo-yoing grain markets, a major source of alternative energy feed stocks, were lower last week, as hopes rose for good harvests. By Friday on the Chicago Board of Trade, maize for delivery in July had fallen to US$3.94 a bushel from US$4.25 a week earlier. Wheat for July dropped to US$5.10 bushel from US$5.84.
Falling corn markets helped ease ethanol costs, with plant profitability showing a net improvement in the US for the first time in months. Rack ethanol prices fell moderately in many areas of the US, with the national average price slipping 0.66 cents per gallon to US$1.9716.
Read More..
Senin, 08 Juni 2009
Indonesia Hits Out At Palm Oil Slurs
Western countries are using climate change as an excuse to constrain palm oil production in Asia because it competes with Western interests, including conventional fuels, Indonesia's palm oil industry chief claimed last week. The head of the Indonesian Palm Oil Producers, Joefly J. Bahroeny, said his industry had been accused of killing orangutans, burning forests and selling a product high in cholesterol. Environmental NGOs, he alleged, could be part of a campaign driven by Western business interests in competing commodities such as rapeseed, soybeans and fossil fuels. "It's all about business," he told a forum of palm oil producers. "Palm oil has become a competitor as biofuel, not only with rapeseed products but also a real competitor to fossil fuels controlled by Western interests. Do these other people truly care about global warming? Or do they also want to get rich with the excuse of climate change?"
The Indonesian government earlier this year lifted a moratorium on palm oil expansion into peat lands and the industry may now develop peat bogs less than three meters deep. Bahroeny said he expected big palm oil expansion by members of the association in East Kalimantan in the near future and that his industry helped to alleviate poverty in rural areas. Indonesia has already sowed enough high yield seedlings to double its output to 40 million metric tonnes by 2020. He also said he was suspicious of a UN-backed scheme to reduced emissions from deforestation and degradation (REDD), which allows developing countries to raise potentially billions of dollars in carbon credits in exchange for conserving forests and peat lands.
Profit-taking pulled commodities prices back on Friday. Mid week, taking a lead from the price of crude - which hit a seven-month high of US$70 in New York - markets gained as both long-term investors and speculators bought commodities to hedge the falling dollar, as well as in anticipation of higher demand on world economic recovery. Markets were volatile, reflecting the swings in the dollar rates. "However, there are still many reasons to be cautious. For a start, although some commodity firms have undoubtedly taken advantage of lower prices to rebuild stocks in anticipation of a pick-up in final demand, that increase in demand has yet to materialise," cautioned Capital Economics analyst Julian Jessop.
Ethanol futures weakened at the end of the week, with July contracts falling 2.6 US cents per gallon, following a light retraction in the corn futures market. The overall tone of the ethanol market remains firm, although after the significant price shift earlier in the week, traders backed away at the end of the week. July contracts are trading at US$1.765 per gallon. Ethanol rack prices posted sharp gains, following strong gains in the futures markets. Ethanol plant profitability levels improved 2 US cents per gallon according to the ethanol the benchmark Neeley Biofuels.
Carbon prices moved in a similar pattern, closing the week down 14 cents at €14.01 for the December EUA OTC contract.
The latest uranium price is also down, with the U308 price survey showing it closing 50 cents lower at US$49.50 a pound.
In alternative energy feedstock markets, corn on the Chicago Board of Trade for July delivery rose to US$4.45 a bushel from US$4.36 a week earlier, although there was profit-taking on Friday. The trade was beginning to look ahead to this week's supply-and-demand report. Analysts' average projection is for very slight increase in government forecasts. Wheat for July fell to US$6.28 a bushel from US$6.37. The US winter wheat production is forecast by research group Informa to fall by 19 per cent this year. That is less than the decline predicted by the government. Farmers have planted fewer acres and cold and dry weather has damaged the crop. The US is the world's major exporter of the grain.
Wheat futures rose by 19 per cent in May on the Chicago Board of Trade and by 17 per cent on the Kansas City Board of Trade, the biggest monthly rallies for both exchanges since September 2007. November Paris milling wheat was down €1.00, or 0.6 per cent on Friday, at €157.75 a metric ton, with 3,459 lots moved. London November feed wheat traded flat at £130.25 a ton. Brokers said technicals have been driving the wheat market, with no fresh fundamental news and prices were following the US rather than weather patterns. However, there was still about six weeks where "mother nature" could change the fundamental picture. Standard-quality wheat prices in the French cash market delivered at Rouen were up €2 on Thursday's prices at €137 a ton.
Soybean futures for July delivery rose 3.5 per cent for the week, capping a sixth-straight weekly gain. Earlier, the most-active contract rose to US$12.365, the highest since last September.
Read More..
The Indonesian government earlier this year lifted a moratorium on palm oil expansion into peat lands and the industry may now develop peat bogs less than three meters deep. Bahroeny said he expected big palm oil expansion by members of the association in East Kalimantan in the near future and that his industry helped to alleviate poverty in rural areas. Indonesia has already sowed enough high yield seedlings to double its output to 40 million metric tonnes by 2020. He also said he was suspicious of a UN-backed scheme to reduced emissions from deforestation and degradation (REDD), which allows developing countries to raise potentially billions of dollars in carbon credits in exchange for conserving forests and peat lands.
Profit-taking pulled commodities prices back on Friday. Mid week, taking a lead from the price of crude - which hit a seven-month high of US$70 in New York - markets gained as both long-term investors and speculators bought commodities to hedge the falling dollar, as well as in anticipation of higher demand on world economic recovery. Markets were volatile, reflecting the swings in the dollar rates. "However, there are still many reasons to be cautious. For a start, although some commodity firms have undoubtedly taken advantage of lower prices to rebuild stocks in anticipation of a pick-up in final demand, that increase in demand has yet to materialise," cautioned Capital Economics analyst Julian Jessop.
Ethanol futures weakened at the end of the week, with July contracts falling 2.6 US cents per gallon, following a light retraction in the corn futures market. The overall tone of the ethanol market remains firm, although after the significant price shift earlier in the week, traders backed away at the end of the week. July contracts are trading at US$1.765 per gallon. Ethanol rack prices posted sharp gains, following strong gains in the futures markets. Ethanol plant profitability levels improved 2 US cents per gallon according to the ethanol the benchmark Neeley Biofuels.
Carbon prices moved in a similar pattern, closing the week down 14 cents at €14.01 for the December EUA OTC contract.
The latest uranium price is also down, with the U308 price survey showing it closing 50 cents lower at US$49.50 a pound.
In alternative energy feedstock markets, corn on the Chicago Board of Trade for July delivery rose to US$4.45 a bushel from US$4.36 a week earlier, although there was profit-taking on Friday. The trade was beginning to look ahead to this week's supply-and-demand report. Analysts' average projection is for very slight increase in government forecasts. Wheat for July fell to US$6.28 a bushel from US$6.37. The US winter wheat production is forecast by research group Informa to fall by 19 per cent this year. That is less than the decline predicted by the government. Farmers have planted fewer acres and cold and dry weather has damaged the crop. The US is the world's major exporter of the grain.
Wheat futures rose by 19 per cent in May on the Chicago Board of Trade and by 17 per cent on the Kansas City Board of Trade, the biggest monthly rallies for both exchanges since September 2007. November Paris milling wheat was down €1.00, or 0.6 per cent on Friday, at €157.75 a metric ton, with 3,459 lots moved. London November feed wheat traded flat at £130.25 a ton. Brokers said technicals have been driving the wheat market, with no fresh fundamental news and prices were following the US rather than weather patterns. However, there was still about six weeks where "mother nature" could change the fundamental picture. Standard-quality wheat prices in the French cash market delivered at Rouen were up €2 on Thursday's prices at €137 a ton.
Soybean futures for July delivery rose 3.5 per cent for the week, capping a sixth-straight weekly gain. Earlier, the most-active contract rose to US$12.365, the highest since last September.
Read More..
Senin, 18 Mei 2009
Coal Set To Exceed US$100/tonne
A strong recovery in coal prices is being forecast, with London equity broker Evolution seeing an imminent end to the current glut. The seasonal winter rise in global coal demand for power generation, it says, should absorb the current supply glut and boost prices.
News in international coal markets included figures of Chinese first quarter purchases from Australia of 3.67 million tonnes of coking coal, up from just 72,000 tonnes in the previous quarter and up from 353,000 in the corresponding quarter a year earlier. "China's demand for hard coking coal has stemmed the decline in Australian exports and saved producers from another round of production cuts," Macquarie analyst Jim Lennon said. Thousands of jobs have been lost in Queensland's coking coal mines as BHP Billiton, by far the world's biggest coking coal exporter, Xstrata and Rio Tinto cut output on slackening demand.
Coal prices have fallen from a record high of US$200 a tonne cif Europe last September to around US$60. Demand for coal in Asia is a major support factor for coal prices and China and India are expected to continue to drive demand growth in Asia. Europe is also expected to see a more balanced market from the third quarter of this year, says Evolution. Shares in UK Coal climbed 3.9 per cent to 141p as Evolution Securities repeated its “buy” rating and raised its target price to 289p from 170 p. The analyst firm said the company “is set to benefit from new, more realistic, supply contracts with the electricity generators”.
Evolution also said new contracts would allow a significant increase in price received for coal which would generate an increase in earnings and cash-flow. Evolution Securities analyst Charles Kernot said: “The forward curve for (benchmark) API2 coal swaps is US$100/tonne for 2010 on average, which reflects a reversal of the glut we’ve got at the moment and a move into a more natural market next years.”
While London brokers were being cautious about prices rising above US$100 a tonne, last week JSW Steel, India’s largest steelmaker, was reported to have signed a coking coal contract for the year at US$100 per tonne. Sajjan Jindal, vice chairman and managing director, said the deal was signed with an Australian company, but refused to divulge its name. Last year, JSW Steel had contracted coking coal at $305 per tonne.
News from US coal producers included a rise in US Alpha Natural Resources Q1 net profit. Alpha Natural Resources reported income of US$41 million in the first quarter, up from US$25.5 million in the same period last year, as higher coal prices offset lower demand for the fuel. During the quarter, Alpha Natural said that it hit a record coal margin of US$23.48/ton, 81 per cent higher than in the same period of 2008.
Uranium prices also continued to strengthen, the spot price U308 rising US$5 to $51 a pound according to the latest Ux Consulting survey.
Meanwhile, the US climate bill that should pass through to the House within the next week is turning out to be less tough than originally planned. The bill sought a 20 per cent cut in emissions below 2005 levels by 2020, but 17 per cent now seems the figure. Obama’s policy is for cuts equivalent to about 14-15 per cent below 2005 levels. The bill’s clean power mandate has also been lowered, with 15 per cent rather than 25 per cent of power to come from renewable sources by 2025 and with a 5 per cent gain in energy efficiency by 2020. State governors would be able to lower the targets further in their state under certain circumstances.
Pressure on the beleaguered US ethanol industry could intensify this year as producers chase a smaller US corn crop, driving up prices and pushing down their profit margins. Corn accounts for 70 per cent of US ethanol producers’ costs.
Corn production for the new season is projected at 12.1 billion bushels, down 11 million bushels from the last season as US planting has been delayed by heavy rain and floods Meanwhile, Ethanol use is expected to reach 4.1 billion bushels, or about one-third of the total production, up from last year's 3.75 billion bushels. Following a string of bankruptcies in 2008 by some of the nation's major ethanol producers, 2009 is shaping up to be yet another "difficult year" for the industry, said Robert Sharp, an ethanol analyst at energy information provider Platts.
While prices and demand for corn last year made the crop unattractive for many farmers, corn use for ethanol production is rising. The federal government mandated gasoline refineries to blend 10.5 billion gallons of ethanol in 2009, up from last year's 9 billion gallon.
“The federal biofuels mandate and improved blending incentives together pushed up corn use for ethanol production”, the USDA said in the monthly report, the World Agricultural Supply and Demand Estimates. "Ethanol producer returns, however, will remain under pressure as excess production capacity weighs on producer margins," it added.
As a result of rising demand and falling production, corn year-end stocks for the new season are projected to be down 28 per cent to 1.1 billion bushels. Hussein Allidina, an analyst at Morgan Stanley, said the USDA's new report is "bullish" for corn prices, owing to lower year-end inventories. "Planting progress is way behind schedule in big corn states," said John Sanow, commodity market analyst at commodities information provider DTN. "New-crop futures could test US$4.70, and if the planting delays continue could test US$5.25."
Cash corn prices also set seven-month highs early in the week but fell later to leave elevator bids more than one per cent lower overall. CBOT July corn futures plunged US 11 cents on Friday to suffer weekly losses of US 3 3/4 cents, ending at US$4.265 a bushel on Wednesday, still more than 40 percent higher than their December low near US$3 a bushel.
US forecasts of further falls in the country’s soy surplus after strong export demand sent July contracts 19 cents higher to seven month highs in Chicago. "Rumoured [export sales] cancellations by China never materialized and the USDA actually announced a fresh sale of 120,000 tons [4.4 million bushels] of soybeans to China yesterday," the CME Group was quoted as saying on Friday.
Prices paid for physical supplies of soft red winter wheat dropped three per cent. An average decline of one cent in domestic basis only exacerbated 13 1/2-cent losses accrued by July CBOT futures. "Sluggish export demand and large stocks of wheat globally remain bearish factors," said a Doane Agricultural Services wheat market analysis.
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News in international coal markets included figures of Chinese first quarter purchases from Australia of 3.67 million tonnes of coking coal, up from just 72,000 tonnes in the previous quarter and up from 353,000 in the corresponding quarter a year earlier. "China's demand for hard coking coal has stemmed the decline in Australian exports and saved producers from another round of production cuts," Macquarie analyst Jim Lennon said. Thousands of jobs have been lost in Queensland's coking coal mines as BHP Billiton, by far the world's biggest coking coal exporter, Xstrata and Rio Tinto cut output on slackening demand.
Coal prices have fallen from a record high of US$200 a tonne cif Europe last September to around US$60. Demand for coal in Asia is a major support factor for coal prices and China and India are expected to continue to drive demand growth in Asia. Europe is also expected to see a more balanced market from the third quarter of this year, says Evolution. Shares in UK Coal climbed 3.9 per cent to 141p as Evolution Securities repeated its “buy” rating and raised its target price to 289p from 170 p. The analyst firm said the company “is set to benefit from new, more realistic, supply contracts with the electricity generators”.
Evolution also said new contracts would allow a significant increase in price received for coal which would generate an increase in earnings and cash-flow. Evolution Securities analyst Charles Kernot said: “The forward curve for (benchmark) API2 coal swaps is US$100/tonne for 2010 on average, which reflects a reversal of the glut we’ve got at the moment and a move into a more natural market next years.”
While London brokers were being cautious about prices rising above US$100 a tonne, last week JSW Steel, India’s largest steelmaker, was reported to have signed a coking coal contract for the year at US$100 per tonne. Sajjan Jindal, vice chairman and managing director, said the deal was signed with an Australian company, but refused to divulge its name. Last year, JSW Steel had contracted coking coal at $305 per tonne.
News from US coal producers included a rise in US Alpha Natural Resources Q1 net profit. Alpha Natural Resources reported income of US$41 million in the first quarter, up from US$25.5 million in the same period last year, as higher coal prices offset lower demand for the fuel. During the quarter, Alpha Natural said that it hit a record coal margin of US$23.48/ton, 81 per cent higher than in the same period of 2008.
Uranium prices also continued to strengthen, the spot price U308 rising US$5 to $51 a pound according to the latest Ux Consulting survey.
Meanwhile, the US climate bill that should pass through to the House within the next week is turning out to be less tough than originally planned. The bill sought a 20 per cent cut in emissions below 2005 levels by 2020, but 17 per cent now seems the figure. Obama’s policy is for cuts equivalent to about 14-15 per cent below 2005 levels. The bill’s clean power mandate has also been lowered, with 15 per cent rather than 25 per cent of power to come from renewable sources by 2025 and with a 5 per cent gain in energy efficiency by 2020. State governors would be able to lower the targets further in their state under certain circumstances.
Pressure on the beleaguered US ethanol industry could intensify this year as producers chase a smaller US corn crop, driving up prices and pushing down their profit margins. Corn accounts for 70 per cent of US ethanol producers’ costs.
Corn production for the new season is projected at 12.1 billion bushels, down 11 million bushels from the last season as US planting has been delayed by heavy rain and floods Meanwhile, Ethanol use is expected to reach 4.1 billion bushels, or about one-third of the total production, up from last year's 3.75 billion bushels. Following a string of bankruptcies in 2008 by some of the nation's major ethanol producers, 2009 is shaping up to be yet another "difficult year" for the industry, said Robert Sharp, an ethanol analyst at energy information provider Platts.
While prices and demand for corn last year made the crop unattractive for many farmers, corn use for ethanol production is rising. The federal government mandated gasoline refineries to blend 10.5 billion gallons of ethanol in 2009, up from last year's 9 billion gallon.
“The federal biofuels mandate and improved blending incentives together pushed up corn use for ethanol production”, the USDA said in the monthly report, the World Agricultural Supply and Demand Estimates. "Ethanol producer returns, however, will remain under pressure as excess production capacity weighs on producer margins," it added.
As a result of rising demand and falling production, corn year-end stocks for the new season are projected to be down 28 per cent to 1.1 billion bushels. Hussein Allidina, an analyst at Morgan Stanley, said the USDA's new report is "bullish" for corn prices, owing to lower year-end inventories. "Planting progress is way behind schedule in big corn states," said John Sanow, commodity market analyst at commodities information provider DTN. "New-crop futures could test US$4.70, and if the planting delays continue could test US$5.25."
Cash corn prices also set seven-month highs early in the week but fell later to leave elevator bids more than one per cent lower overall. CBOT July corn futures plunged US 11 cents on Friday to suffer weekly losses of US 3 3/4 cents, ending at US$4.265 a bushel on Wednesday, still more than 40 percent higher than their December low near US$3 a bushel.
US forecasts of further falls in the country’s soy surplus after strong export demand sent July contracts 19 cents higher to seven month highs in Chicago. "Rumoured [export sales] cancellations by China never materialized and the USDA actually announced a fresh sale of 120,000 tons [4.4 million bushels] of soybeans to China yesterday," the CME Group was quoted as saying on Friday.
Prices paid for physical supplies of soft red winter wheat dropped three per cent. An average decline of one cent in domestic basis only exacerbated 13 1/2-cent losses accrued by July CBOT futures. "Sluggish export demand and large stocks of wheat globally remain bearish factors," said a Doane Agricultural Services wheat market analysis.
Read More..
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