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