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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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Sunday, 17 June 12
S7 & S8 ROUTES ARE LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI gained some increase after continues fall for several weeks.
The BDI increased by 47 points (up by 5.36 pct) closing at 92 ...
Saturday, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Tuesday, 12 June 12
ITACHA RESOURCES BUYS SARANA MARINE - INSIDER STORIES
Insider Stories reported that, coal mining company PT Itacha Resources, a joint venture between Anthoni Salim and Glenn Yusuf, announced that Itacha ...
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- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Meralco Power Generation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Independent Power Producers Association of India
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Africa Commodities Group - South Africa
- White Energy Company Limited
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Semirara Mining Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Global Coal Blending Company Limited - Australia
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Latin American Coal - Colombia
- Economic Council, Georgia
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
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