We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Monday, 27 July 09
COKING COAL, IRON-ORE LIKELY TO BENEFIT NON-INTEGRATED STEEL PRODUCERS
 Economictimes reported that, The second half of the financial year 2008-09 was one of the toughest periods for steel companies, especially the non-integrated players without access to captive sources of raw material. The double whammy of falling sales realisation and higher input costs pulled down operating profit margins significantly.
The non-integrated producers continued to pay higher raw material prices as a part of long-term contracts signed during the beginning of the year. However, as old contracts have come to an end and new ones are being signed, these companies are breathing a sigh of relief.
The new contracts have taken into consideration the current market realty. The prices of two key inputs –
–iron ore and coking coal – have come down more than 50% in the spot market. As per reports, steel firms have signed long-term contracts for coking coal at around $110-120 per tonne and iron ore at $65-70 per tonne.
The new contract prices mark a decline of around two-thirds and one-third from their yearago levels for coking coal and iron ore, respectively. Steel prices have also fallen sharply during the same period. Because of these developments, it is essential to understand the impact of the new prices on the profitability of major steel producers, especially the non-integrated ones, for the next few quarters.
Steel prices in a number of countries have been regulated in past year, and India is no exception. Current international steel prices are 50% lower than year-ago levels and in India the decline has been 25-35 %. Accordingly, depending on the company’s market (domestic and overseas) exposure, the impact on profitability of new long-term contract will vary.
Going by international prices, a company with an operating margin of around 25% last year is expected to see a contraction in margin by around 1,000-1 ,300 basis points compared to year-ago levels. It means the fall in steel product prices outweighs the drop in input costs. The only solace for such a company is the improvement in margin from the previous two quarters. Sequentially, there could be an improvement of more than 500-1 ,000 basis points in the operating margin to 10-15 %.
For instance, many international steel producers reported either losses or a 5-8 % operating margin during the Mar ’09 quarter. Such companies are definitely going to see better days ahead. In India, Tata Steel, which has significant operations in Europe, is going to be one of the key beneficiaries. The operating margin of Corus, however, is not expected to exceed 2%. The new pricing will have a bigger impact on domestic companies.
Domestic steel prices have not fallen much due to government intervention and relatively higher domestic demand. Also, coking coal, which accounted for around two-thirds of raw material cost last year, has witnessed a much sharper decline in prices compared to iron ore. And most of the coking coal consumed in India is imported and its pricing depends more on the international environment rather than the domestic market. Hence new coking coal contract prices will capture the poor international market conditions.
The benefit of new long-term contracts for domestic players would depend on factors such as the extent of dependence on external suppliers for raw materials, actual contract prices and the month from which the contract became effective, among others. Higher the dependence on external suppliers, more the benefit.
Of the top five listed steel companies, JSW Steel and Ispat Industries are likely to benefit the most. The average operating margin from the September quarter onwards is expected to expand by around 1,000-1,500 basis points compared to the Mar ’09 quarter. The June quarter, however, will see a partial impact, depending on when the new contracts came into force.
Other top players that are likely to benefit are Steel Authority of India (Sail) and Jindal Steel & Power. Both of them are self-sufficient in iron ore but depend on outside suppliers for coking coal. The positive impact on the operating margin of these companies on account of the new prices would not be more than 500 basis points though.
Source: Economic Times - India Times
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Thursday, 13 August 09
JAYPEE GROUP. L&T INK RS 4,000-CRORE (US$ 824,818,084) DEAL
Second order bagged by L&T in the supercritical segment.
Jaiprakash Power Ventures Ltd (JPVL), promoted by the $7-billion Jaypee group, has s ...
Wednesday, 12 August 09
COAL INDIA TO IMPORT 4 MLN T 2009/10 - MEDIA
State-run Coal India Ltd plans to directly import 4 million tonnes of coal in the current fiscal year to March 2010, Chairman Partha Bhattacharyya s ...
Wednesday, 12 August 09
CHINA'S LARGEST COAL PRODUCER TO SET UP COAL RESERVES
China's National Development and Reform Commission has commissioned China Shenhua Energy Co., the nation's largest coal producer, to build 10 stor ...
Wednesday, 12 August 09
NALCO SMELTER CONSTRUCTION MAY FACE DELAY
The Jakarta Post reported that, India’s state-run National Aluminum Company (Nalco) may postpone the construction of an aluminum smelter in In ...
Wednesday, 12 August 09
COAL MINE PLAN SHOT DOWN OVER GREEN CONCERNS
The Times of India reported that, In a major setback to Adani Powers, the principal chief conservator of forests (PCCF) has rejected its proposal fo ...
|
|
|
Showing 6511 to 6515 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Therma Luzon, Inc, Philippines
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- The University of Queensland
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Kideco Jaya Agung - Indonesia
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Sakthi Sugars Limited - India
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- PTC India Limited - India
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Aditya Birla Group - India
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- CNBM International Corporation - China
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Sarangani Energy Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Central Java Power - Indonesia
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
|
| |
| |
|
