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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
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Monday, 20 July 09
INDONESIA PRODUCES 72 MILLION MT IN FIRST HALF OF YEAR: OFFICIAL
Indonesia produced 72 million mt of coal in the first half of 2009, or 31.3% of the government’s target this year, a senior government officia ...
Sunday, 19 July 09
JINDAL S&P IN TALKS TO BUY SA COAL MINE FOR RS 350-400 CR (US$ 80 - 90 MILLION)
Economic Times reported that, Naveen Jindal-led Jindal Steel & Power (JSPL) is acquiring a thermal coal mine in South Africa, a top company exec ...
Saturday, 18 July 09
REN POWER CZ COMMISSIONS ANOTHER PHOTOVOLTAIC POWER STATION
COALspot.com (Press Release): REN Power CZ, a company in the Czech Coal Group, has put into operation another photovoltaic power station. The plant ...
Saturday, 18 July 09
THE FUTURE FOR SUPRAMAX FOR NEXT 3 YEARS TILL 2012 WOULD BE AROUND US$ 13,500 PER DAY - CAPT. REDDY
COALspot.com ( Singapore): The market moved up sharply this week , which was quite unexpected.
The BDI was up by 557 which is an increase of 18 ...
Friday, 17 July 09
CHINA COAL-SPOT PRICES EDGE LOWER, SUPPLY APLENTY
China Mining reported that, spot prices in China's top coal shipping port Qinhuangdao edged lower from a week earlier, as supply grew, offsetting t ...
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Showing 6586 to 6590 news of total 6871 |
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- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- GMR Energy Limited - India
- CIMB Investment Bank - Malaysia
- Semirara Mining and Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- PTC India Limited - India
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Barasentosa Lestari - Indonesia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Trasteel International SA, Italy
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