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