Russell Stewart by 982qA77

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									US Coal Thermal Exports
Overview




Russell Stewart
November 2011
Istanbul
   Disclaimer

Market data and other statistical information used throughout this
presentation are based on independent industry publications,
government publications, reports by market research firms or other
published independent sources. Some data are also based on our
good faith estimates which are derived from our review of internal
surveys, as well as the independent sources listed above. Although we
believe these sources are reliable, we have not independently verified
the information and cannot guarantee its accuracy and completeness.
    Who We Are and What We Do
   Established in 1994
   Coking Coal / PCI / Thermal Coal Sales
   Markets: Global
    ◦ South America
    ◦ Far East
    ◦ Europe
   Sources: Global
    ◦ US (East Coast, Gulf Coast)
    ◦ South America (Colombia, Venezuela)
    ◦ South Africa
   Typical Annual Sales Volume: > 2 Mmt
           U.S. Economy Still in ‘Recovery’




Source: Federal Reserve Bank of Richmond, Haver Analytics
              22 Years of US Coal Exports

               70

               60

               50

               40

               30

               20
                                      Met
               10
                                      Steam
                0




Source: EIA, STAT USA, IHS McCloskey, SSY, Stifel Nicolaus
    WHAT ABOUT 2011THERMAL EXPORTS?

                                                     33

                                                     31

                                                     29

                                                     27
Forecasts indicate                                                           2010
                                        Million MT
More than 30M in                                     25
                                                                            actual
2011                                                 23

                                                     21
                                                                             2009
                                                     19
                                                                            actual
                                                     17

                                                     15
                                                          Stifel Nicolaus     EIA


Source: EIA, Stifel Nicolaus, IHS McCloskey, UBS
         WHAT ABOUT 2011 METALLURGICAL
                  EXPORTS?




Forecasts
indicate
More than 60M
in 2011




Source: EIA, Stifel Nicolaus, IHS McCloskey, UBS
              Prompt Freight and Spot Coal Prices
                Updated Q3 2011




ARA Index: Source –global Coal
Freight: Source – SSY
              Prompt Freight and Spot Coal Prices
              Higher FOBT but Much Higher Costs
              $ / MT FOBT




                                       Potentially Profitable




Source: SSY, Stifel Nicolaus, global Coal, ECI
            US Role in Global Steam Coal Growth


           Global thermal coal is projected to grow from
           668 M in 2010 to 999 M by 2020 +331 M
         ◦ Bulk of the Thermal supply will come from
           Australia and Indonesia
         ◦ Meanwhile US thermal coal increase during the
           same period will be + 8.4M – only 2.5% of the
           amount of the total +331 M projected growth.
         ◦ US Higher Production Costs continue to be the
           main impediment.



Source: Wood MacKenzie
                EBITDA Operating Costs for Selected Miners
 $ per st




            Illinois Basin Mining Costs compare favorably to Colombia, not so for CAPP



Source: Company Reports, Fitch Ratings
          Natural Gas Prices Declining
          While Coal Production Costs Increase
        Avg. Day Ahead Henry Hub Gas               EBITDA Costs per st
                  $/Mmbtu




Source: EIA, ICE, Company Reports, Fitch Ratings
USCIE 2011
              Ever changing Fuel Dynamics in the US
                                M st Imports vs. ILL Basin Coal




Source: EIA
Summary of US Role in Global Thermal
Markets
 US will continue to be a swing supplier in the
  International Thermal trade.
 As CAPP production cost increase, buyers will shift
  their focus to lower cost Illinois basin and PRB
  production.
 Projected Demand Growth in India and China –
  could change the supply dynamic in Atlantic?
  However most likely is several years off.
Thank You!



   Russell Stewart, President
Exporting Commodities International
       TEL: +1 856 797 2004
  EMAIL: rjstewart@eci-coal.com
         www.eci-coal.com

								
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