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Wednesday, 06 January 16
NEW COAL PRICE PASS-THROUGH REGULATION BENEFITS CHINA IPPS - FITCH RATINGS
Fitch Ratings says the new Coal Price Pass-through Mechanism announced by the National Development and Reform Commission (NDRC) on 31 December 2015 will bring highervisibility and stability to China's independent power producers' (IPPs) earnings.
This new mechanism gives a much clearer guidance on the benchmark coal price for reference and when the tariff adjustments will occur, unlike the previous mechanism which did not provide clear details on these items.
The NDRC announced a cut in the on-grid power tariff for thermal power of CNY0.03 per kilo-watt hour (kwh) effective from 1 January 2016 - which the agency considers to be modest compared to the drop in Qinghuangdao coal prices of around 17% since the last tariff revision in April 2015. The tariff reduction is also moderate compared to the end-2015 dark spread for China coal fired plants of around CNY0.25/kwh as estimated by the agency. Nonetheless, we believe the tariff cut may negatively impact thermal power producers whose utilisation hours are under pressure.
The NDRC launched new China Thermal Coal Price Indices by province in September 2015, which will serve as a reference for future tariff adjustments. The new tariff framework will result in annual tariff adjustments by referring to thermal coal prices in 2014 as the benchmark coal price. The review will take place at the end of every year, and adjustments will be effective from 1 January in the following year.
The new mechanism also sets different pass-through factors of between 0.8x to 1.0x for coal price changes of between CNY 30 to 150/ton from 2014 levels; any changes beyond this range will not be passed through. The effective pass-through of cost changes will vary from 0 to 71% within this band of coal price variations. This is lower than the 90% under previous regulations. However, we do not see a high risk of spreads materially contracting for power producers in the foreseeable future as the benchmark coal price (of 2014) is more than 20% higher than current coal price levels, and given our expectation of subdued coal prices in the medium-term.
The new mechanism also introduced an automatic pass-through of a coal-fired power on-grid tariff to commercial and industrial (C&I) retail power tariff, subject to a K-factor adjustment to account for cross-subsidies and various surcharges. Fitch believes that the Chinese government took advantage of current low coal prices to rationalize the relationship between coal prices, the coal-fired power on-grid tariff and the C&I retail power tariff.
However, this new mechanism only regulates the benchmark on-grid tariff, while power tariffs for "market power" through direct purchases by large customers or the power market exchange programme are not covered. While the new tariff regulations provide more clarity and certainty to thermal power producers, Fitch believes that coal-fired power IPPs will continue to face challenges with weakened utilization hours due to low power consumption growth and the addition of large amounts of thermal and renewable power capacity in the medium-term. Although current power sold through the power market or direct purchase is relatively small (less than 10%), more and more power is likely to be sold under the "market power" scheme as an increasing number of provinces will introduce such programs. IPPs also have a strong incentive to participate in "market power" programmes to gain higher utilization, albeit at discounted tariffs.
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Thursday, 03 December 15
PANAMAX BUSINESS REMAINED UNDER PRESSURE LAST WEEK
COALspot.com: Following the new record lows the Dry Bulk market witnessed the week prior, the BDI took a much needed breath during the past days.
...
Wednesday, 02 December 15
Q3' 16 FOB RICHARDS BAY COAL SWAP SLIGHTLY UP FOR THE THIRD STRAIGHT WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up month over month and fell week over week.
The Q1’ 2016 &nbs ...
Wednesday, 02 December 15
MARKET INSIGHT - VASSILIS LOGOTHETIS
Boom and bust cycles in commodity prices are not something rare, yet they have important implications both for the world economy in general and for ...
Tuesday, 01 December 15
FOB NEWCASTLE COAL SWAP UP THIS PAST WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $3.75 per ton (9.26%) month over month to US$ 36.75 per ton. The swap ...
Tuesday, 01 December 15
TANKERS VERSUS BULKERS - JUST PLAYING CATCH UP? - CLARKSONS
It’s now more than a year since the tanker market took off. In mid-2014 tanker earnings picked up and since then have been in the $30-$40,000 ...
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- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Aditya Birla Group - India
- ICICI Bank Limited - India
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Manunggal Multi Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- White Energy Company Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Bayan Resources Tbk. - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Wilmar Investment Holdings
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Grasim Industreis Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- The University of Queensland
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
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