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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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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Planning Commission, India
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Coal Council - USA
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- PetroVietnam Power Coal Import and Supply Company
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- White Energy Company Limited
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- AsiaOL BioFuels Corp., Philippines
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