Vladimír Urbánek (Kurzy.cz)
Czech markets  |  October 15, 2012 08:56:44

NWR announced prices for the production volumes for 4Q12 and 3Q12 - price drop by 20%


NWR announced this morning the price of production volumes for 4Q12 and 3Q12. Coking coal prices for 4Q12 should reach 102 EUR / t, which is 20% less compared to 3Q12 (126 EUR / t). The above price generally corresponds prices on world markets and lower than, for example contracted by BHP for the Japanese Mitsubishi (130 EUR / t), but there is a significant difference in the quality of coal. Coke price for 4Q12 is set on the edge of 264 EUR / t (294 EUR / t in 3Q12) and again rather by world prices. Price for thermal coal is 74 EUR / t for the calendar year 2012. Regarding the volumes sold 1.16 mt k NWR coal, 1.22 mt of thermal and 129tis.t coke.From our perspective, management changed its outlook on coal sold from 10.2 to 10.3 when the distribution of 50/50 coking and thermal, which is a decrease from the previous 10.25 to 10.5 mt in the ratio 48/52 in favor of thermal coal. Confirmed volume was 600 kt of coke.

Price indication for us is not a big surprise considering that correspond to global prices. However, the sharp fall in prices is not good news. More negatively evaluate a shift in projection sold below production. Overall estimates for 4Q confirm weakness in the industry.

The agreed price of coal for the 4th quarter continued to decline. Specifically coking coal to € 102 per tonne (-19% kv. / Sq.) And coke for € 264 per tonne (-8% kv. / Sq.). Prices are on the top of our estimates, and therefore consider the slightly positive. On the other hand, realized prices in 3Q lagged by 2-3% over the original view. NWR confirmed this year planned production at 11-11,1 million tons and decreased slightly (about 100 thousand). Expected sales to 10.2 to 10.3 million tonnes. At the same time, however, increased the rate of coking coal from 48% to 50%.

Overall, slightly positive that the company was unable to agree on prices at the upper limit of our estimates. This points to a strong local position "duopoly" NWR / JSW least in the segment of hard coking coal.Also interested in coking coal and coke are surprisingly retained, suggesting improved market conditions in Central Europe compared with Western Europe. On the other hand, NWR will be in the 4 at quarter operating profit and loss if prices remain at this level in the fourth quarter NWR next year was not able to achieve a positive operating profit.

Petr Bartek

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NWR oznámila ceny produkce pro 4Q12 a objemy za 3Q12 - pokles cen o 20%

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