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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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Tuesday, 14 July 09
NEWCASTLE WEEKLY COAL EXPORTS RISE 11%; SHIP QUEUE DECREASES
Bloomberg reported that, Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, gained 11 ...
Monday, 13 July 09
EXPORT COAL PRODUCTION FROM MOOIPLAATS COULD START IN NOVEMBER
Mining Weekly reported that, South Africa-focused emerging miner Coal of Africa (CoAL) has completed a revised mining layout for its Mooiplaats ...
Monday, 13 July 09
NAPOCOR AWARDS 195,000 T COAL TO INDONESIAN FIRMS
ABC-CBN News reported that, Philippine electricity producer National Power Corp (Napocor) has awarded 195,000 tons in coal supply contracts to two I ...
Monday, 13 July 09
PAKISTAN TO IMPORT ABOUT 2.4 MILLION TONS OF INDONESIAN COAL AND 1.6 MILLION TON OF SOUTH AFRICAN COAL WITHIN NEXT 12 MONTHS
COALspot.com (Pakistan) : Pakistan has exported well over 12 million tons of cement while local sales have dropped a bit with the result 33 million to ...
Monday, 13 July 09
COAL SECTOR IN VIETNAM INCREASE THE TARGET 43 MILLION TONNES THIS YEAR
Asian Mining Stock reported that, there was a change in a very good Coal Mining Industries Group (TKV) that Vietnam has decided to increase coa ...
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- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Attock Cement Pakistan Limited
- Deloitte Consulting - India
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Parliament of New Zealand
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Price Waterhouse Coopers - Russia
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- Straits Asia Resources Limited - Singapore
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Georgia Ports Authority, United States
- Medco Energi Mining Internasional
- PTC India Limited - India
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