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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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Tuesday, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
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- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Planning Commission, India
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Coalindo Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- The Treasury - Australian Government
- Anglo American - United Kingdom
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
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