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Enron Mail |
print this and i need a folder titled ARA Coal Summary
---------------------- Forwarded by Jeffrey A Shankman/HOU/ECT on 10/02/2000 12:09 PM --------------------------- Jez Peters 09/30/2000 09:41 AM To: Stuart Staley/LON/ECT@ECT, George McClellan/HOU/ECT@ECT, Mike McConnell/HOU/ECT@ECT, Jeffrey A Shankman/HOU/ECT@ECT, Peter Bradley/LON/ECT@ECT, Samuel Grossman/LON/ECT@ECT, Pierre Aury/LON/ECT@ECT, Chris Connelly/LON/ECT@ECT, Riaz Rizvi/LON/ECT@ECT, Manfred Ungethum/LON/ECT@ECT, Sven Becker/FRA/ECT@ECT, John Moran/LON/ECT@ECT, Cornelia Luptowitsch/LON/ECT@ECT, Scott Longmore/LON/ECT@ECT, Tiffany Cochran/LON/ECT@ECT, Elizabeth McCarthy/LON/ECT@ECT, Tom Kearney/LON/ECT@ECT, Stephen Pirozzi/LON/ECT@ECT, Dimitri Taylor/LON/ECT@ECT, Kenny Nicoll/LON/ECT@ECT, Lisa Kent/LON/ECT@ECT, Candace Parker/LON/ECT@ECT, Harry Papadopoulos/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT, John Bowman/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT cc: Paul Mead/LON/ECT@ECT, Karolina Potter/LON/ECT@ECT, Meindert Witteveen/LON/ECT@ECT, Louis Redshaw/LON/ECT@ECT, Niamh Clarke/LON/ECT@ECT Subject: ARA Coal Mkt Summary MKT SUMMARY Dust is settling after latest supply side incident to hit the market - namely the Drummond Force Majeure. What remains now is cif mkt which is in backwardisation for Q4 and Q1 01 versus the rest of 2001 but where stocks in Rotterdam are at near record highs at around 2.5 million mt for the end of September. Indeed, utilities and traders alike have taken advantage of the weak spot mkt we experienced during August and early September to buy up distressed parcels in ARA and play the cash / carry game. This has certainly paid dividends as any slack which was in the pipeline has certainly been swallowed due to a number of incidents which has restricted production/shipments from various geographies. While the whole curve has shifted north as a result of early buying interest for 2001 the backwardisation in the frt curves coupled with above has seen Q4 and Q1 prices increase by some $4 over past 6 weeks to absolute values at $39 cif ARA - this represents a prm of between $0.75-$1.00 over Jan/Dec 01 run. Believe the front end will continue to remain tight due to supply squeeze we are feeling and high frt rates but going forward into next year we may see some price pressure from levels we are today as a consequence of lower frt rates, increase in prod'n, synfuel into Europe and weaker continental power prices from the high levels they are today. Control of FOB origin prices through continued consolidation in the production side of the industry could put ruin to this and hence we look for opportunities to spread our long FOB origin posn into as many geographies as possible. SPOT TRADES Bot one pnmx of Caypa Steam coal from Masefield for December shipment FOB Santa Marta at $US 31 basis 11800btu. Sold 70mmt of chinese material to EVN delivered stockpile for October and November delivery at what is the equivalent of $41 fob barge Rotterdam basis 6000 kcal/kg Switched 20mmt Australian Steam Coal Fob barge Rotterdam with Electrabel for 20mmt of Colombian Steamcoal at agreed differential. Bot physical put option from TXU (still to be finalised) for Cape quantity for Q1 delivery with a $40 strike price basis Rotterdam and $40.40 basis Hunterston at $0.75 cent premium with exercise date of 30th November. Sold 2 x 15mmt SECA contracts to Glencore for December delivery at $40 Fob barge and $40.50 fob barge respectively. SELLING SIDE Mission continue to look for La Loma material for December delivery - now looking at 2 pnmx 1 into east coast and 1 into hunterston. Bewag have tender out for 500mmt for 2001 Rheinbraun/Duisbourg combined looking for close to 250mmt Colombian material on delivered basis. Working with Electrabel to offer them 50mmt a month for 2001 Veag looking for 300mmt cif Rostock for Nov 00/June 01. EDFT after tonnage for Q4 and a cape a month Q101. Endesa - 4 capes for 2001. Fenosa - looking for 250mmt of low vol U.S material split across 2001. HdelC entertaining swap of Russian material for U.S coal during 2001 Billiton looking for small parcel of Colombian material in ARA. BUYING SIDE Emerald - still looking to buy high Sulphur material from U.S to execute Preussen deal. 3 firm pnmx plus 3 options. Masefield - offered further pnmx cargo of 11800 material for Q1 delivery at $32 FOB Santa Marta. BBC Trading - 10-15mmt Russian material ex-stockpile Sczcecin to supply our bewag commitments. Putting final touches to purchasing South African Material FOB RBCT for 200. Likely to be a cape quantity for Q2 delivery. AES - UK coal for Q4 and Q1 2001. BHP - 1 June 2001 Cape. EOL We are just shy of reaching 500,000mt mark for total volume of tonnage traded via EOL with the activity that went on this week. There continues to be excellent interest from all sectors of the industry and we really need to focus on converting the increasing number of guest user ID's we are giving out into actual transactions on the system - many are still afraid of the technology, many are still ignorant of how they can utilise the system as a risk management tool and many simply don't have the authority - hence we continue to focus on preaching the word to all and sundry!! Highlight this week was having Glencore trade on two occasions and not surprisingly they were propping the mkt up on the buy side. We are moving ahead with posting options on the SECA contract on EOL. GAMEPLAN Current mkt environment has generated healthy buying interest for 2001 and with the expectation that we will still see frt rates ease off for 2001 from the high levels today ($9.50 RBCT - ARA Cape) combined with a somewhat weaker tone in continental power prices for 01 we are fairly keen to hit some of this business at current price levels. We have benefited from the current price hike maintaining an overall long position but with the lions share of that long being placed in Drummond we must focus on securing physical commitments from Drummond for first half 01 shipments in order to participate in any of this business with peace of mind. Hence we continue to look for opportunities to tie up tonnage from other geographies such as South Africa, Australia, U.S and Russia that will allow us the flexibility which adds so much value to our book. Have extended dlist this week - if you donot wish to receive then please let me know and likewise if you would like people added. Best Regards Jez
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