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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The cut and thrust between the various lobbies for the full range of energy sources in a tough global market is being conducted, with companies claiming initiatives to make bottom line savings and at the same time arguing for the positive heath of their enterprises, as well as a bright future for the sectors in which they operate. With major pressures on the inter-sector competition set to last for a decade at least, we could end up with clean, competitively priced energy and a breakthrough in power storage technology. Who knows?
As the major private-sector international player in the coal industry, Peabody Energy Corporation (NYSE:BTU) (St. Louis, Missouri) is looking forward to a glowing future for King Coal.
"We have multiple opportunities in the coming years across all the key levers of value creation: production growth, priced upside, cost containment and valuation expansion," said Gregory H. Boyce, the company's chairman and chief executive officer, said at the company's 2012 analyst and investor forum in New York. "There are bright spots amid recent market headwinds, including the recent increase in seaborne metallurgical coal prices, accelerating China coal imports, and signs of stabilizing U.S coal supply-demand fundamentals. Longer term, rising electricity generation and steel production, required to fuel growing economies of the Asia-Pacific region, will continue to drive sustained increases in global coal demand."
Global metallurgical coal use is forecast to jump 25% by 2016, driven mainly by China and India, adding another 250 million tons of demand growth.
Boyce said that Peabody was completing a number of late-stage projects in Australia while re-evaluating the timing of select emerging projects. Among the projects for completion is the Millennium mine expansion. With the modified timeframes, the company now targets Australian coal production of 45 million to 50 million tons by 2015, up from 25 million tons in 2011.
While the U.S. coal market has been impacted by a weak economy and low natural gas prices, the outlook for coal has strengthened, following the recent sharp declines in U.S. shipments, a rise in natural gas prices, and seasonal drawbacks in utility stockpiles.
Peabody continues to project that U.S. coal demand will decline by 100 million to 120 million tons in 2012. Recently, claimed Boyce, U.S. gas prices had begun to rebound and futures prices are well above spot level.
"Coal supply-demand fundamentals appear to be coming back into balance, with May coal shipments down 145 million tons on an annualized pace and coal inventories beginning their seasonal drawdown," he said.
U.S. thermal exports could grow to between 150 million and 170 million tons within five years, and Peabody is developing a sustainable, large-volume export business from the West, Gulf and East coasts to capture emerging opportunities. The company shipped U.S exports of 6.6 million tons in 2011 and is targeting 10 million tons for 2012.
The company now targets capital expenditures of $1 billion to $1.2 billion in 2012, down $200 million from targets set at the beginning of the year.
For related information, see June 27, 2012, article - Gas Market Long-term 'Lock-in' Could Save Billions and Reduce Risk.
View Project Report - 300010973
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
As the major private-sector international player in the coal industry, Peabody Energy Corporation (NYSE:BTU) (St. Louis, Missouri) is looking forward to a glowing future for King Coal.
"We have multiple opportunities in the coming years across all the key levers of value creation: production growth, priced upside, cost containment and valuation expansion," said Gregory H. Boyce, the company's chairman and chief executive officer, said at the company's 2012 analyst and investor forum in New York. "There are bright spots amid recent market headwinds, including the recent increase in seaborne metallurgical coal prices, accelerating China coal imports, and signs of stabilizing U.S coal supply-demand fundamentals. Longer term, rising electricity generation and steel production, required to fuel growing economies of the Asia-Pacific region, will continue to drive sustained increases in global coal demand."
Global metallurgical coal use is forecast to jump 25% by 2016, driven mainly by China and India, adding another 250 million tons of demand growth.
Boyce said that Peabody was completing a number of late-stage projects in Australia while re-evaluating the timing of select emerging projects. Among the projects for completion is the Millennium mine expansion. With the modified timeframes, the company now targets Australian coal production of 45 million to 50 million tons by 2015, up from 25 million tons in 2011.
While the U.S. coal market has been impacted by a weak economy and low natural gas prices, the outlook for coal has strengthened, following the recent sharp declines in U.S. shipments, a rise in natural gas prices, and seasonal drawbacks in utility stockpiles.
Peabody continues to project that U.S. coal demand will decline by 100 million to 120 million tons in 2012. Recently, claimed Boyce, U.S. gas prices had begun to rebound and futures prices are well above spot level.
"Coal supply-demand fundamentals appear to be coming back into balance, with May coal shipments down 145 million tons on an annualized pace and coal inventories beginning their seasonal drawdown," he said.
U.S. thermal exports could grow to between 150 million and 170 million tons within five years, and Peabody is developing a sustainable, large-volume export business from the West, Gulf and East coasts to capture emerging opportunities. The company shipped U.S exports of 6.6 million tons in 2011 and is targeting 10 million tons for 2012.
The company now targets capital expenditures of $1 billion to $1.2 billion in 2012, down $200 million from targets set at the beginning of the year.
For related information, see June 27, 2012, article - Gas Market Long-term 'Lock-in' Could Save Billions and Reduce Risk.
View Project Report - 300010973
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
