Vladimír Urbánek (Kurzy.cz)
Czech markets  |  January 28, 2013 09:15:20

NWR: Rates of production for 1Q13 - weak prices for thermal coal, the pressure grows on coke

NWR announced this morning prices of production. Price of coking coal for 1Q13 reached 103 EUR / t (102 EUR / t in 4Q12). This is above our projection of 95 EUR / t By the end of this year we expect further growth from current levels. Coke price is 253 EUR / t is also slightly above our expectations (246 EUR / t). Conversely price of steam coal, this year (2013) is lower than our projection.

Price for 2013 is 60 EUR / t ie. decrease of 20% (our estimate EUR 65 / t). Electricity price of coal is 80% of the calendar year the remainder (20%) will be contracted to quarterly basis.NWR also confirmed the previously announced 2013 target, output 10-11mt of coal and about 0.8 mt of coke. CAPEX should drop by 30-50% y / y Prices for coking coal and coke are slightly better than our estimates, however, thermal coal prices is a negative surprise for us. NWR publish results for 4Q12 21st February and, according to our projections, it should report a loss.

NWR today reiterated volumes in 4Q 12 and announced the prices achieved in 4Q 12 and 1Q 13 contracts and 2013. NWR rates were almost in line with the previous views except the price of coke, which were 3% below.NWR announced a significant 19% decline in coal prices to € 60 per tonne for the current calendar year, which is also 7.7% below our estimate of € 65 per tonne. Coking coal prices were agreed on the amount of 3% QoQ to € 103 per tonne for the 13th 1Q This is roughly in line with the company's earlier warning that the market for coking coal in the region, there is still pressure and prices will not depend so fully from international benchmarks. The relatively slight increase in coking coal prices is also a result of the expected worse mix (only 45% of hard coal as against 48% in Q3 12). Coke prices were agreed in 1Q 13 1% below, which, given the already high 76% of the expected proportion of more expensive foundry coke is not good (NWR).

Reported prices are generally very weak especially for thermal coal, is also seeing increasing pressure on prices in the coke market. Coking coal prices are not so bad, but NWR clotting 1Q 13 bad production mix. NWR so given the weak outlook for 2013 seem relatively highly praised.

Petr Bartek

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NWR: Ceny produkce pro 1Q13 - slabé ceny u energetického uhlí, tlak roste u koksu

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