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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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- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Indo Tambangraya Megah - Indonesia
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- SN Aboitiz Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- White Energy Company Limited
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Metalloyd Limited - United Kingdom
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Riau Bara Harum - Indonesia
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
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