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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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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Electricity Generating Authority of Thailand
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Parliament of New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
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