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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 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 05 November 20
THE INDONESIA COAL PRICE REFERENCE RISES FOR SECOND CONSECUTIVE MONTH
COALspot.com: The Indonesia Coal Price Reference rose for a 2nd month by 9.24% month on month. The Indonesia Coal Price Reference for the month of ...
Wednesday, 04 November 20
PHILIPPINES COAL MORATORIUM HIGHLIGHTS DRAMATIC PIVOT TO RENEWABLE ENERGY INVESTMENT FOR LOWER PRICES AND POWER SYSTEM RESILIENCE - IEEFA
Policymakers and industry leaders ready to embrace new energy technologies
The Department of Energy’s call for a moratorium on ...
Wednesday, 04 November 20
FOREIGN INVESTORS FACE TOUGH TIMES CLOSING VIETNAM’S REMAINING COAL POWER DEALS - IEEFA
Project bankability at risk as new regulations threaten usual contractual terms
Foreign investors will face higher-than-usual risks ...
Wednesday, 04 November 20
MARKET INSIGHT - INTERMODAL
As the end of the year approaches, one would definitely notice that the newbuilding orderbook for bulk carriers is significantly smaller compared t ...
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- Indo Tambangraya Megah - Indonesia
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Bukit Baiduri Energy - Indonesia
- Thiess Contractors Indonesia
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Central Java Power - Indonesia
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Banpu Public Company Limited - Thailand
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Ministry of Transport, Egypt
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Georgia Ports Authority, United States
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Australian Coal Association
- White Energy Company Limited
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- AsiaOL BioFuels Corp., Philippines
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