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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- India Bulls Power Limited - India
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- The University of Queensland
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Binh Thuan Hamico - Vietnam
- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Gujarat Electricity Regulatory Commission - India
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