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Tuesday, 30 December 14
INDIA INC TO BENEFIT AS IMPORTED COAL PRICES SET TO FALL - RAHUL PRITHIANI
The Hindu: India‘s coal import volumes are set to rise by over 30 per cent over the next two years to 214 million tonnes in 2015-16, as domestic supply falls short of surging demand.
However, globally, the situation is just the reverse. Severe oversupply with few takers will drag down prices of both thermal and coking coal by about 25 per cent. This will slash fuel costs and support the profitability of India Inc. Lower prices will also cap India’s coal import bill, unlike a 17 per cent annual growth witnessed over the last five years.
Supply soars
Miners in major coal exporting countries like Indonesia and Australia have significantly ramped up investments over the past five years, anticipating steady off take from major importers such as India and China. For example, coal mining investments in Australia are estimated to have doubled to about $50 billion over 2009 to 2013 from about $25 billion over 2003 to 2008. Moreover, domestic coal supply in China is also likely to increase as its railway capacity for hauling coal expands by nearly one-third to three billion tonne by 2020. This will ease transportation bottlenecks in that country.
Thus, while coal supplies will grow, there are likely to be few takers.
Even as miners stack up supplies, off take by major consumers including China, the U.S. and Europe is set to post a muted rise. Weak GDP growth, a gradual shift to cleaner fuels and rising energy efficiencies will curb demand.
The most telling fact is that China, the world’s largest importer of coal, has placed import curbs, will further restrict demand. Over the last three months, it has banned imports of low-grade coal, while imposing import duties on both thermal (six per cent) and coking coal (three per cent). Global economic weakness and China’s measures to move away from an investment-led growth model will also halve the growth in coking coal importsover the next five years.
Thus, oversupply in the global coal market, along with weakening currencies in exporting countries, is expected to drag down thermal and coking coal prices by 25 per cent approximately over the next two years to $65 per tonne and $115 per tonne by 2015, respectively.
Advantage India
For India, which has scarce domestic energy resources, the above changing dynamics certainly bode well. India’s coal import volumes are expected to rise by 33 per cent over the next two years, as domestic production lags demand. In such a scenario, falling global coal prices will help India Inc.
In the power sector, projects running on imported coal — including that of Tata Power, Adani Power and Essar Power — will benefit the most from sliding coal prices. These projects have incurred huge losses since 2012-13 when Indonesian coal prices almost doubled following a change in regulations. However, with imported coal prices plummeting, returns of such projects are expected to improve. As per our analysis, for a project operating on imported coal, even a one per cent fall in fuel costs will drive up equity returns by 25 basis points.
Even power projects based on domestic coal will benefit, as they can increase blending of imported coal and boost utilisation rates. In particular, plant-load factors (PLFs) of post-2009 power projects, which languished at just 51 per cent in 2013-14, will improve gradually.
Similarly, input costs for cement and metal manufacturers will decline, supporting their profitability. For cement players, reliance on imported coal has gradually risen — reaching 30-35 per cent of total coal consumption in 2013-14, as the power sector was prioritised for domestic coal supply. As demand growth slowed and operating costs rose, the industry’s operating margins fell to 15 per cent in 2013-14 from 28 per cent in 2009-10. Therefore, falling imported coal prices, will reduce cost pressures for the sector through lower fuel costs, which will decline by 3-4 per cent in 2014-15. In particular, cement plants, which have higher reliance on coal imports, will witness a much sharper reduction in fuel costs, as imported coal prices are set to fall by 15-17 per cent in 2014-15.
The decline in global coking coal prices is good news even for steelmakers beset by muted demand and global overcapacity. With good-quality domestic supply being scarce, Indian steelmakers import nearly 70 per cent of their coking coal requirements and coal accounts for 30 per cent of their manufacturing costs. Thus, a sharp decline in global coking coal prices will drag down operating costs by 6-8 per cent in 2014-15 and thereby support profitability.
There are also some macroeconomic advantages. Most importantly, despite the rise in coal import (volumes), the value (or the import bill) will only rise marginally at a CAGR of one per cent over the next two years. This contrasts sharply vis-à-vis the past 5 years, when the bill had risen at a 17 per cent CAGR to Rs.888 billion (approximately US$ 13,950,428,156).
The author is Director, CRISIL.
Source: The Hindu
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Tuesday, 16 December 14
THIS PRICE IS A STEAL - EVA TZIMA
COALspot.com: Despite concerns that the slowdown of the Chinese economy would affect imports of iron ore, it seems that this has not been the case ...
Tuesday, 16 December 14
FOB RICHARDS BAY COAL SWAP FOR Q2' 15 DELIVERY CLOSED AT US$ 65.60 PMT
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month.
The Q1 swap has lost US$ 0.18 (-0.27%) month on month ...
Tuesday, 16 December 14
SUB-BIT FOB INDONESIA COAL SWAP CONTINUES ITS FALL
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week over week and day on day.
The Q1 swap has lost US$ 1.7 ...
Monday, 15 December 14
WILL TANKERS BENEFIT FROM REEMERGENCE OF FLOATING STORAGE PLAYS? - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The tanker market has been seeing high freight rates for some time now, riding on the back of low oil prices, which are boosting demand from develo ...
Monday, 15 December 14
INDONESIAN COAL PRICE REFERENCE CRASHES THROUGH $65
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised down the coal bench mark price once again in December. HBA for t ...
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- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Planning Commission, India
- PTC India Limited - India
- Mercator Lines Limited - India
- AsiaOL BioFuels Corp., Philippines
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Commonwealth Bank - Australia
- European Bulk Services B.V. - Netherlands
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- Economic Council, Georgia
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Mineral Development Corp Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Australian Coal Association
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- VISA Power Limited - India
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
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