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Coal Production Increases On Weaker Australian Dollar

By  +Follow August 23, 2013 10:21AM
Tickers Mentioned:

The recent weakness of the Australian dollar is causing an uptick in coal production in the country that appears likely lead to a further increase in surplus, which for 2012 were already tallying at some 20 million tons.

The discovery of massive shale reserves in the US has led to a boom in oil and natural gas production, which has in turn taken a toll on domestic usage of coal as an energy supply. The story is different in rapidly developing countries, however, and Australian producers have been taking advantage of the struggling currency in order to increase output while overhead expenses are low. Indeed, coal shipments from the country are up over 13 percent on a year-over-year basis. According to the financial services firm Macquarie Group Ltd, the 17.6 million tons the country exported in June was a monthly record.

Higher exports have not come without consequences however. Australia’s Newcastle export terminals in New South Wales saw prices drop 10 percent in the same month to $77.75 per ton. Coal prices in Newcastle were down nearly 20 percent overall last year, and July’s average of $76.63 per ton was the lowest since fall of 2009.

Analysts have responded to this situation by reducing forecasts, as Goldman Sachs (GS) and Citigroup (C) both agree that coal prices in 2013 will be lower by around 7 percent. And the industry itself seems to be fully aware of the situation. Yancoal Australia Ltd., a Chinese-run operation, announced in its recently-released mid-year production results that the relatively stable demand that has persisted is being overtaken by growing surplus, as mining companies take advantage of currency conditions to produce more for less before having to contend with inevitable cost cutting measures.

The Australian Coal Association has recently noted that the strength of the Australian dollar in recent years accounts for some 30 percent on higher prices, and says that the industry is 11,000 jobs poorer as a result.

For the time being, however, demand is expected to stay strong enough to support a 7 percent projected increase to 183 million tons exported by the end of the year. Indonesia, the only country that exports more coal than Australia, could see exports up as much as 6 percent. For the time being, the difficult decision to cut output can and will continue to be postponed.

Results for gs
Jeff Davis
23 Apr 14 12:35:44
$GS looks like 164 coming..tough to crash if that happens
23 Apr 14 12:31:01
RT @ForTraders: Bank of New York Mellon : BNY Mellon Considers Sale of Corporate Trust Arm -Bloomberg http://t.co/xoDWYvEL6h $BK $GS
Market Int Center
23 Apr 14 12:30:29
Potential Goldman Sachs $GS Trade Has 2.74% Downside Protection ( http://t.co/fYEXVnFS9D )
Bidness Etc
23 Apr 14 12:30:28
Analysts at $GS expect $AAPL to report revenues of $43.8 billion http://t.co/529Po9SebG
Bidness Etc
23 Apr 14 12:27:42
$FB's Ad revenues by the $GS are estimated at $2.11 billion with mobile ad revenues contributing $1.14 billion http://t.co/phIdOWexyf
Bidness Etc
23 Apr 14 12:10:27
$GS estimated revenues of $2.34 billion for $FB, with a non-GAAP EPS of 23 cents http://t.co/46x4AmhGp7
23 Apr 14 11:50:02
Bank of New York Mellon : BNY Mellon Considers Sale of Corporate Trust Arm -Bloomberg http://t.co/xoDWYvEL6h $BK $GS
23 Apr 14 11:40:32
Yeah they fixed the prices LOWER! STUPID! Goldman, JPMorgan seek dismissal of aluminum price-fixing lawsuits http://t.co/om9GmAAJ1c $JPM $GS
Bishop SheltonDaniel
23 Apr 14 11:37:23
#Buy $DNAX #DNA #Energy #Drinks #New #CEO #Real #Experience > $FNMA $HEMP $PMCM $PHOT $PLPL $CBIS $JPM $GS $MS $TSLA $FB $TWTR $GOOG $MSFT
23 Apr 14 11:30:05
Goldman Sachs : , JPMorgan seek dismissal of aluminium price-fixing lawsuits http://t.co/fUsVvdpCR2 $GS $JPM
23 Apr 14 11:29:31
$GS wants it, she really wants it
23 Apr 14 11:29:02
@RedDogT3Live @GuyAdami @CNBCFastMoney $C $BAC $GS.. ALL HOD.. Tell??
Media Sentiment
23 Apr 14 11:21:56
$GS received a new alert. Find out why at http://t.co/WHJp8eTsSr #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 515
23 Apr 14 11:21:49
RT @ACInvestorBlog: $GS perking up
Brooke Sutherland
23 Apr 14 11:21:27
$BK said to work with $GS on finding buyers for its corporate trust business: http://t.co/pvASce3e9w by @MattMonks123
Duane Christie
23 Apr 14 11:20:52
@talktoskirt Jesus will take over for Lloyd at $GS and continue to do god's work.
23 Apr 14 11:17:30
Banks holding nicely $GS $BAC
Antonio Costa
23 Apr 14 11:15:09
$GS perking up
Golden State SEO
23 Apr 14 11:12:55
RT @GoldmanSachs: 25 ways $GS saw the world change: No. 25 The importance of environmental risk management is increasing: http://t.co/FRRgA…
Golden State SEO
23 Apr 14 11:12:40
RT @GoldmanSachs: 25 ways $GS saw the world change: No. 5 #Mobile presents big commercial opps, but competition is tough: http://t.co/u8Afk…
Shahien Nasiripour
23 Apr 14 11:11:25
RT @MattMonks123: Bank of New York Mellon $BK taps $GS to shop corporate trust arm worth at least $2.5B scoop @MattMonks123 @BloombergNews
Matthew Monks
23 Apr 14 11:07:25
Bank of New York Mellon $BK taps $GS to shop corporate trust arm worth at least $2.5B scoop @MattMonks123 @BloombergNews
shagarie ®aynor
23 Apr 14 11:07:07
$GS commodity-trading unit poised to gain market share as pressure from regulators drives competitors to scale back http://t.co/k51Wbcu429
Mark Moskowitz
23 Apr 14 11:06:12
Taking profits on $GS, no desire to be long anything, 1 point on a long today is great
23 Apr 14 11:04:52
$GS at resistance and looking poised to bust through :-)
23 Apr 14 11:02:06
$GS The closest thing to a sure thing for your money http://t.co/mQhwBsxINj
23 Apr 14 10:45:56
OMG! this market is going HIGHER! $SPX $SPY $DIA $IWM $QQQ $FB $TWTR $AMZN $IMPV $SCTY $NFLX $F $C $GS
Mark Moskowitz
23 Apr 14 10:29:43
$GS working well, I hope you got some
Robin Cage
23 Apr 14 10:29:41
Get Free research on $BMS $GS $G $GOOG I suggest http://t.co/p3LoBF5Wju
23 Apr 14 10:23:52
RT @ACInvestorBlog: $GS If it breaks out above $161.12 the stock has plenty of room to run up to at least $168 http://t.co/lqdU89KRxZ
23 Apr 14 10:23:32
RT @rblotnicky: Goldman to profit as competitors exit commodities http://t.co/MLWnQYfgbW $GS
23 Apr 14 10:21:29
$GS - Cree weakness a buying opportunity, says Goldman at Goldman -> http://t.co/KprleFK6Od #stock #stocks #stockaction
23 Apr 14 10:21:11
$GS - Numericable Raises $10.9 Billion in Junk Bond Offering -> http://t.co/nhAYNAPDOz #stock #stocks #stockaction
Art Baron
23 Apr 14 10:16:05
MT @GoldmanSachs 25 ways $GS saw the world change: No. 9 #Smartgrid tech increasing efficiency &.... #GSAnnual2013: http://t.co/6TJsr7jfuw
Art Baron
23 Apr 14 10:14:08
RT @GoldmanSachs: WATCH: "We're in a global shift toward #renewable sources of energy" – $GS's Stuart Bernstein. http://t.co/CSxUbCitmp #cl…
23 Apr 14 10:13:38
Watching $GS here, over 161 can move a little
Shaun Downey
23 Apr 14 10:12:49
"@ACInvestorBlog: $GS $C $JPM nice action in a weak tape"
23 Apr 14 10:03:57
$GS went red to green. Market feeling a little bullish again
Antonio Costa
23 Apr 14 09:58:28
$GS If it breaks out above $161.12 the stock has plenty of room to run up to at least $168 http://t.co/lqdU89KRxZ
Antonio Costa
23 Apr 14 09:53:49
$GS $C $JPM nice action in a weak tape
Heath Sterling
23 Apr 14 09:52:20
RT @stock_coach: $TSLA puts, $SPY puts, $GS puts $NFLX puts all money makers. It's just too easy when you have the right teacher. http://t.…
Master Muppet
23 Apr 14 09:49:05
Goldman to profit as competitors exit commodities http://t.co/MLWnQYfgbW $GS
Gary Hudson
23 Apr 14 09:46:36
Goldman to profit as competitors exit commodities $GS http://t.co/LEyNAbqK4c
23 Apr 14 09:42:39
Goldman to profit as competitors exit commodities http://t.co/AbcfmG1ban $GS
23 Apr 14 09:40:05
$GS Why Credit Is Key for the Housing Recovery http://t.co/38aLV4dCQT
23 Apr 14 09:37:37
$PFE Is this one to watch? $ISRG $GS $LWSP $BBEP $UUP http://t.co/mOl9AJnyO1
Algo Screen
23 Apr 14 09:32:18
#UnitedStates - $GS #Goldman_Sachs_Group_Inc / 8 long patterns with success >=82.5% and a return of >=1.1%. #Stock #Stocks #StockAction
Ayodeji Balogun
23 Apr 14 09:30:14
RT @BloombergNews: As competitors scale back, Goldman looks to gains market share in commodities; http://t.co/Z0Y8zSVMlT $GS http://t.co/He…
23 Apr 14 09:25:50
GFI Stock Chart $GFI $XLK $GS $BHP http://t.co/dPfSTrq3FH http://t.co/oU9V97epmw
By  +Follow August 23, 2013 10:21AM



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