Coal Prices has started to rise....

Dear Investors, The markets are set to remain range bound with a positive bias as most of the Asian Markets are trading in the green--Nikkei and Straits Times trading in Red when the last reports poured in. Coal Prices has started to move northwards as Crude becomes expensive:Australia , S Africa struggle to expand facilities to boost output: Coal prices has started to rise as oil and natural gas become more expensive and as exporters in Australia and South Africa struggle to expand rail and port facilities to boost output. It is natural that Coal prices will rise as due to high oil prices. Coal's share of the world's energy market has climbed to 28 % from 25 % in 2000. Coal prices at $2.50 per million British thermal units, are less than half the price of natural gas, which costs more than $6 per million British Thermal units, while Oil products cost more than $13. Soaring Crude: Crude oil in New York has climbed about 25 % this year, reaching a record $78.4 a barrel on July 14, partly on concern the escalating conflict in West Asia, and also on the fear that it might spread to other Arab countries. Prices of Crude have also risen due to a dispute over Iran's nuclear research, unrest in Nigeria and as Iraq reduce output. The UK natural gas prices have gained 33% in the past year. Coal for delivery year in the Netherlands rose to $62.70 per tonne on July, 14 from $62.25 a week earlier. It was as low as $52.98 on November 21, 2005. Exports Drop: In China, the fourth largest thermal coal exporter, exports fell 12 % in the year to date while imports rose 60 %, Mr. Franscico Blanch, head of global commodities research at Merrill in London , said. "Strong Asia demand is restricting export growth," he said. In Australia there are "Severe port and rail bottlenecks in Queensland and Newcastle," limiting export growth over the next tow-to-three years. Adverse weather and train derailments curbed South African exports to 10 % in the first quarter this year compared with a year earlier. China's exports are falling partly due to Governments closure smaller, unsafe mines. Also due to strong demand from the user industries like steel and power, the coal prices can only move northwards. Carbon Prices: Credit Suisse Group raised its Asian coal price forecasts because of increased demand from projects that will turn the commodity into liquid fuels. Coal prices in 2010 may average $45 a tonne, compared with an earlier forecast of $39, an analysts wrote in a July 6 report. Asian thermal coal contracts in 2006-07 may be fixed between $52 and $52.50 per tonne the Tex Report said July 1. Moreover, Coal demand may rise in Europe following a decline in carbon dioxide emission-permit prices said Merrill's Mr Blanch. For each unit of power generated coal produces about double the carbon with natural gas. This might have trickle down effect to the rest of the world. Carbon dioxide permits in Europe fell from a high of 31 Euros ($39) in April to 17.45 euros today on the European Climate Exchange in Amsterdam. The decline means utilities "will till favour coal over other thermals fuels, lending support to coal demand growth in industrialised nations," Mr Blanch said. With the crude prices still hovering above $70 a barrel, there could be nothing better that Coal; as India has huge reserves, but due to limited extraction capacity its prices in domestic market are expected to remain firm in the coming months and might shoot just after the monsoons. So keep watch on Gujarat NRE Coke and Chandra Prabhu International Ltd---both the companies deal in coals. But it remains to be seen, if the domestic prices overshoot the world-wide prices. Anyhow the price escalation which has started to expected to trickle down to the following quarters. This might also trigger the Steel companies to raise the price of their finished products. [With inputs from various sources] Best wishes, Suman Mukherjee India. www.sumanspeaks.blogspot.com www.pkblogs.com/sumanspeaks http://finance.groups.yahoo.com/group/SumanSpeaks/ www.bcozindia.com -