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Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
 Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, although there is a risk low prices may persist into 2013, changing the industry's supply side dynamics.
The price of thermal coal (5,500 kcal coal at Newcastle Australia on a free-on-board basis) reached a two-year low of USD87 per metric ton in early June 2012, down from USD142/mt in January 2011. Major reasons for this decline include China's economic slowdown and high coal inventory levels, increased production and exports from Indonesia and Australia, and increased exports by US coal producers due to cheap natural gas displacing coal used in US power generation.
Fitch believes that prices can recover from current lows once demand from key importers - China and India - improves, and the supply side adjusts to reflect the price environment. India depends on coal as its major energy source and is increasingly relying on imported coal as it struggles to increase domestic production. Likewise in China, thermal coal fired power represents more than 70% of the country's energy needs; Fitch believes thermal coal demand from China will lift again post sufficient policy easing by the government, and continue rising over the medium-to-long term in line with the country's strong GDP growth outlook, albeit lower than previous years.
The weak pricing environment is exposing the business risks of high-cost coal producers, as coal prices fall near or below the marginal cost of production. Many Australian producers have high cash costs of production; such operators will be significantly affected if prices remain low for an extended period. At the same time, sustained low coal prices can shift buyers from low-rank coal to higher-grade coals and thus negatively affect both demand and realized prices for low-rank coal.
Fitch notes that many large coal producers have contracts in place with both volumes and prices fixed, typically for a period of one year; such contracts can account for a meaningful share of their total revenues - for example around 65% for Adaro Indonesia ('BB+'/Stable) and around 45% PT Indika Energy ('B+'/Positive). These operators would be insulated from a temporary weakening of coal prices to some extent. However, should low prices persist through 2012 and into 2013, it will negatively affect the prices they negotiate for 2013; such negotiations typically take place in Q4 and Q1 of each calendar year.
Should the current low price environment persist into 2013, Fitch expects high-cost producers in Australia and the US to undertake production cuts, and review expansion projects under consideration. Fitch also believes that production expansion plans by low-cost producing countries like Indonesia may be curtailed. Such actions would limit coal production levels (or growth) and help address oversupply.
In rating companies producing commodities, like coal, Fitch takes a through-the-cycle approach to its ratings; this factors in a reasonable level of rating headroom to accommodate weakening of coal prices. Cash cost of production and cash margins over an industry cycle are given a heavy emphasis and factored into the ratings. Hence, Fitch does not expect any immediate negative rating actions on its rated coal producers in the Asia-Pacific region.
Source: Fitch Ratings
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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Australian Coal Association
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- The Treasury - Australian Government
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Posco Energy - South Korea
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
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