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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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Thursday, 29 December 22
INDIA'S COAL DEMAND LIKELY TO PEAK BETWEEN 2030-2035: MINISTER - ANI
The demand for coal in India will continue and is likely to peak between 2030-2035, Union Minister of Coal, Mines, and Parliamentary Affairs Pralha ...
Thursday, 29 December 22
RIO TINTO AND PARTNERS COULD RECEIVE AS MUCH AS $450M IN GOVERNMENT COMPENSATION FOR COAL PRICE CAP - THE GUARDIAN
Compensation payments for the Gladstone power plant remain the sticking point in the federal government’s coal price cap compensation negotia ...
Wednesday, 28 December 22
MARKET INSIGHT - INTERMODAL
The United Nations Conference on Trade and Development (UNCTAD) published a Global Trade Update on December 13th highlighting that global trade wou ...
Thursday, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
Thursday, 22 December 22
CHINA TIGHTENS VERIFICATION OF SHIPS’ ENERGY CONSUMPTION DATA - GARD
From 22 December 2022, ships trading to Chinese ports must record their energy consumption data in accordance with the requirements of their Ship E ...
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- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Planning Commission, India
- Posco Energy - South Korea
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- PowerSource Philippines DevCo
- Meralco Power Generation, Philippines
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The Treasury - Australian Government
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Aditya Birla Group - India
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Africa Commodities Group - South Africa
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Chamber of Mines of South Africa
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
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