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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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- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- MS Steel International - UAE
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Mercator Lines Limited - India
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Independent Power Producers Association of India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Jorong Barutama Greston.PT - Indonesia
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Planning Commission, India
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- PTC India Limited - India
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