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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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Friday, 02 February 24
DRY BULK MARKET: THE DOWNWARD REVISION IN THE GROWTH OF CAPESIZE TONNE DAYS IN JANUARY WITH THE BCI DROPPING - MARIA BERTZELETOU
In the last week of January, the dry freight market sustained weakness in the Capesize segment, while the number of ballasters in the Southeast (SE ...
Friday, 02 February 24
COAL INDIA ACHIEVES NEARLY 80% OF ITS FY24 PRODUCTION TARGET IN TEN MONTHS - CNBCTV18
For the month of January, the company’s production grew by 9.1% from the same period last year to 78.4 Million Tonnes (MT), from 71.9 MT last ...
Thursday, 01 February 24
CHINA'S WIND, SOLAR CAPACITY TO OVERTAKE COAL IN 2024 - INDUSTRY BODY, REUTERS REPORTED
China’s installed wind and solar capacity is expected to overtake coal for the first time this year, according to industry forecasts.
&nb ...
Thursday, 01 February 24
ANTI-DEDUCTION CLAUSES: CAN A CHARTERER WITHHOLD HIRE WITHOUT AN OWNER'S CONSENT? - SKULD
KNOWLEDGE TO ELEVATE
Summary
In The Anna Dorothea, the Court found that where a charterparty provides that no deduction from hire may be m ...
Thursday, 01 February 24
INDIA REBUILDS COAL STOCKS TO ENSURE ELECTRIC RELIABILITY - REUTERS
India’s electricity supply is much more comfortable at the start of 2024 than in either 2023 or 2022 as coal production has ramped up and the ...
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- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Bangladesh Power Developement Board
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- The University of Queensland
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Videocon Industries ltd - India
- PTC India Limited - India
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Parliament of New Zealand
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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