Front Core Capital Predicts Good Futures For Coal Companies
Front Core Capital has seen that transport bottlenecks and low capacity have so far led most forecasts to expect strongly rising thermal coal imports into China but showed these problems may start to be remedied by new additions to capacity.
- (1888PressRelease) August 30, 2011 - Chinese thermal coal imports will stabilize at around 100 million tonnes a year instead of rising, as previously expected, because of improvements to the country's own coal output and rail capacity.
Front Core Capital has seen that transport bottlenecks and low capacity have so far led most forecasts to expect strongly rising thermal coal imports into China but showed these problems may start to be remedied by new additions to capacity.
Owing to ongoing improvements in China's rail capacity and production increases particularly in Shanxi and Inner Mongolia, we expect that net imports of thermal coal will remain stable just above the 100 million-tonnes level, instead of rising significantly in the next five years.
Together, Front Core Capital expects that these factors will support production growing at rates similar to domestic demand growth, leaving net imports little changed in the medium term.
Other analysts also said that despite higher total demand, Chinese net imports in the first five months of this year were between 5 million and 11 million tonnes a month and at similar or lower levels than last year.
Regarding Japanese imports, government sources said that thermal coal shipments dropped below the 2010 level in April and May.
The majority of adjustment within the power sector to date has been in the form of rotating blackouts, energy conservation, demand reduction, and increases in gas-fired generation, rather than coal-fired generation.
Japanese monthly coal consumption has been between 3 million and 5.5 million tonnes this year, slightly below levels seen in the two previous years.
In numbers, we believe that coal import prices to Europe are going to average $137 per tonne in the second half of 2011 and rise to $150 a tonne in 2012 before trailing off in 2013.
- About Front Core Capital -
Front Core Capital is a Venture Capital and Financial service company. Front Core Capital caters to the expectations of knowledgeable and discerning investors who seek the highest return on their investments. Front Core Capital is a wholly independent company and, as such, is not restricted in any of the funds or investment products we may wish to utilize for our clients' wealth management and financial planning purposes.
- Press Contact at Front Core Capital -
Zach Amiran, press-contact ( @ ) frontcorecapital dot com
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