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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, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Star Paper Mills Limited - India
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Lanco Infratech Ltd - India
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Marubeni Corporation - India
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Indian Energy Exchange, India
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Medco Energi Mining Internasional
- Wood Mackenzie - Singapore
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
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