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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, 21 October 20
INDIA: THE COMMERCIALISATION OF COAL BLOCKS WILL BENEFIT THE ECONOMY - HINDU BUSINESS LINE
As the government of India receives 76 bids for 23 coal mines against the 38 up on auction, what does this commercialisation of coal block allocati ...
Wednesday, 21 October 20
MARKET INSIGHT - INTERMODAL
The second wave of COVID-19 is now a reality; offices are closing again, and stricter rules and regulations are being implemented in public spaces. ...
Tuesday, 20 October 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.82 PCT - XINHUA
China Taiyuan coal transaction price index stood at 127.49 points Monday, up 0.82 percent week on week.
The index, released by China ...
Tuesday, 20 October 20
BIMCO 'SHIPLEASE' TERM SHEET - WATSON FARLEY & WILLIAMS
KNOWLEDGE TO ELEVATE
The ever-growing importance of sale and leaseback transactions as an alternative to financing ships by way of loan, makes ...
Friday, 16 October 20
KOMIPO ON BEHALF OF K GENCO'S INVITED BIDS FOR TOTAL 715,000 MT MIN. 5,700 NAR COAL FOR DECEMBER
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 715,000& ...
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- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Coalindo Energy - Indonesia
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Minerals Council of Australia
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- The University of Queensland
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Global Green Power PLC Corporation, Philippines
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