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World Coal Assessment 2009 Presented By International Commodities Trading And Consulting Company, Cyrios

Russian coal

Detailed observations and projections of the world coal market moving into 2009 are the substance of a comprehensive global summary issued by Cyrios Inc.'s President Albert Abkarian.

Worldwide Demand

The economic global meltdown has arrested much of the expansion seen in the Asian markets as China and India struggle to gain footing in the current crisis. The constrictive nature of the current world market has caused global coal prices to drop to their lowest levels in five years. The price of steam coal has dropped as much as 53 percent in some markets, with a 20 percent price decline in just one month. Falling world demand for commodities, reduced oil prices and subsequent reductions in transportation costs have all contributed to the sharp drop in world coal prices.

Abkarian affirms, "We are projecting that the lower coal prices are temporary and that the prices will increase between 20 and 30 percent within the next six months. We do not expect prices to increase to levels seen in July of 2008 anytime soon." Amsterdam-Rotterdam-Antwerp (ARA) world contract prices for steam coal in December of 2008 have ranged from $75 to $80 dollars per metric ton.

Coal By Country

Internal consumption and difficulty in transportation within the country are tranfiguring China from one of the world's largest exporters of coal becoming an importer of coal in the next few years. Logistically, low coal prices have made it more profitable for Chinese interests to import coal from Russia or from other neighboring countries rather than to transport coal throughout China via its rail system. An added attraction to importing is that many Russian coal sources offer material containing extremely low sulfur, and higher calorific heating values (Kcal) than many domestic Chinese coals.

Indonesia, the world's second largest exporter of coal, is facing a parallel condition. Platts' news reports that the projected increase in domestic coal consumption is mainly a result of the Indonesian government's ambitious plans to accelerate the development of new generation plants, to help avert worsening electricity shortages. Indonesian electricity demands already exceed supply in some areas, while the reserve margin in the dominant Java-Bali system is less than five percent. Overall demand is growing at about seven percent a year. "A review of recent studies indicates that Indonesia will shift from a coal exporter to a coal importer within the next five to seven years as its domestic coal demand increases. We expect opportunities to export to Indonesia to arise as internal coal source production lags behind increasing domestic demand," stated Abkarian.

As the world's leading steam coal exporter, Australia has sufficient reserves to supply and export coal to the region for at least the next seven to ten years. Transportation from Australia to many Asian countries, however, has proven to be extremely difficult. Delays exceeding the contracted delivery date by 30-40 days are reported by Bloomberg news agency. Distance and transportation difficulties associated with Australian sourcing have prompted Asian power plants and large companies to seek alternate suppliers to meet their high-quality steam coal needs.

Abkarian suggests that, "South Korea and India are well poised to lead the world in importing steam coal within the next few years. Despite attempts to modernize production and construction of nuclear power plants near large cities, South Korea still needs a substantial amount of imported coal to meet its burgeoning electrical needs in rural areas."

Similarly, "India has committed to providing electricity to the majority of its citizens within ten years, according to government studies weave reviewed," said Abkarian. "To meet that goal, India must substantially increase its coal consumption for its power plants. To continue to grow at this rate, the country will need a structured commitment to import coal in large quantities." The study is based on information from EIA and the United States Department of Energy.

In recent years, Russia and CIS countries have defined themselves as world-class suppliers of steam coal in the region. Newly discovered reserves over the last few years have only recently been tapped into. Some basins, such as that of the Kemerovo region, contain high quality coal deposits containing very low sulfur content.

The proximity of the Russian coal sources to potential end users in the region is another notable advantage. Transportation times for coal from the Russian Pacific ports to South Korean ports average between two and five days - a significant variance when compared to the transportation times from Australia, for example.

Many Russian coal operations continue to upgrade machinery and equipment to assure buyers in the world markets that they can deliver a large quantity of high grade steam coal in a timely manner.

"Many in the industry hesitate to approach a new source - especially an untested Russian trade house for coal," stated Abkarian. "However, over the past five years, Russian miners, the Russian transportation industry and the Russian government have demonstrated that they can and will compete for a lucrative share of the world export market."

Abkarian adds, "Growing world coal consumption and domestic demand on current coal exporters over the next ten years undeniably leaves room for Russia to position itself as one of the top three exporters of coal in the world."

About Cyrios Inc.

The Cyrios company is comprised of a team of seasoned business professionals, attorneys and former government officials whose core business is in the trade of energy commodities. Cyrios works with companies that need assistance in sorting through complicated business hurdles in Russia and CIS Countries. Learn more by visiting 'http://www.cyrios.com' or by calling President Albert Abkarian at 818-242-2423.
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   Mr. Albert Abkarian
   President
   Cyrios, Inc.
   Glendale,    CA,    91208
   USA
   818-2422423 (phone)
   818-241-0014 (fax)
   Albert@Cyrios.com
   www.Cyrios.com