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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, 14 October 20
CHINA COKING COAL FUTURES RALLY ON REPORTED BAN ON AUSTRALIA CARGOES - REUTERS
Dalian coking coal futures rallied for a sixth straight session on Tuesday after reports surfaced that China had stopped buying coal from Australia ...
Wednesday, 14 October 20
MARKET INSIGHT - INTERMODAL
The tanker market has experienced severe freight rate and asset value declines over the past 5 months. A potential market upturn may arise in the c ...
Friday, 09 October 20
INDIA'S COAL IMPORTS IMPROVE SOMEWHAT, BUT RECOVERY IS UNEVEN - REUTERS
India’s coal imports, depressed by the impact of coronavirus this year, regained ground in September, but in an uneven uptick – shipmen ...
Thursday, 08 October 20
CHINA'S COAL IMPORTS FROM INDONESIA DECLINED 16.4% Y-O-Y, TO 80.2 MLN TONNES IN THE FIRST 9 MONTHS OF 2020 - BANCHERO COSTA
China's coal imports boomed in 2019, surprising many who had expected the government would clamp down strictly on shipments.
...
Thursday, 08 October 20
GLIMMER OF LIGHT FOR COAL, BUT SHORT TERM - FNARENA
Is coal on the rebound? Demand appears stronger and supply reductions have underpinned a tightening market. Certainly, the Newcastle thermal coal p ...
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- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Star Paper Mills Limited - India
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Economic Council, Georgia
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Planning Commission, India
- Sakthi Sugars Limited - India
- Videocon Industries ltd - India
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- Therma Luzon, Inc, Philippines
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- The University of Queensland
- Kumho Petrochemical, South Korea
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Minerals Council of Australia
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- White Energy Company Limited
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- London Commodity Brokers - England
- New Zealand Coal & Carbon
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
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