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Wednesday, 12 October 16
INDIAN STEELMAKERS' DELEVERAGING AT RISK ON COKING COAL PRICE JUMP - FITCH
 The sharp increase in coking coal prices since August 2016 could squeeze Indian steelmakers' profitability and threaten their deleveraging, Fitch Ratings says.
The risk will increase if high coking coal prices persist and domestic steel demand growth remains weak. Leverage for producers such as Tata Steel Limited (BB/Rating Watch Evolving) and JSW Steel Ltd (BB/Negative) jumped in the financial year ending March 2016 (FY16), mainly due to poor profitability, and sustained pressure on margins would hamper the deleveraging process.
Prices for hard coking coal for export by Australia as of 30 September 2016 were 125% (USD100/tonne) higher than the average in the quarter ended June 2016 (1QFY17), according to data from The Steel Index. Prices rallied following China's decision to limit coal mines' operating days to 276 a year, from 330 before, to restructure the industry and improve its profitability. Others issues such as flooding in China's Shanxi province, which reduced supply, and a number of unplanned mine outages in Australia also supported the price rise.
The increase in raw material costs for Indian steel producers could shrink margins, if the cost rise is not passed on to consumers. For example, we estimate that a USD50/tonne increase in Tata Steel's coking coal cost in 1QFY17 would have reduced consolidated EBITDA by around 35%, if all else stayed the same. Similarly, JSW Steel's 1QFY17 consolidated EBITDA would have fallen by around 25%. The impact of higher coal costs would be offset if we assume price realisations for the two companies were 5%-10% higher.
However, the ability of steelmakers in India to raise prices to counter any sustained cost increase is likely to be constrained if weak domestic demand growth persists amid increased capacity. Domestic consumption in April-September 2016 rose by just 2.5% yoy, compared with 5.9% in FY16. Meanwhile, producers, including Tata Steel and JSW Steel, aim to increase sales volume after recent capacity expansions.
The full impact of the recent jump in coking coal prices on steelmakers will be felt from the later part of 3QFY17, as volumes are mostly traded on a contractual basis and priced using monthly or quarterly averages, and companies generally keep two to three months' worth of inventories. JSW Steel relies solely on imported coking coal and is therefore exposed to the cost rises. Tata Steel's Indian operations are less susceptible to the rise in coking coal prices as its own production caters to roughly 45% of its requirements, but its overseas units are at higher risk as they rely on imports.
While short-term supply disruptions are being resolved, it is yet unclear how China's policy on coal will evolve. Steel makers in China have recently requested the government to allow higher coal output to alleviate cost pressures. However, coking coal prices could remain high in the absence of a relaxation in operating guidelines for mines. Fitch raised its mid-cycle price assumption for hard coking coal by around 10% to USD110/tonne for the long term in August 2016.
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Monday, 07 November 16
INDONESIAN COAL PRICE REFERENCE ROSE 59.57 PER CENT YEAR TO MONTH
COALspot.com: The Indonesia coal benchmark price hits to its highest level since May 2013. The government declared benchmark prices for Indo ...
Monday, 07 November 16
HANDYSIZE: THE ASIAN INDICES RECORDED A GRADUAL DROP EVERY DAY - THE BALTIC BRIEFING
Capesize
A rumour-fuelled market this week but essentially rates a touch firmer and owners cautiously optimistic. The flotilla of vessels heading ...
Monday, 07 November 16
THE SUPRAMAX CHARTER RATES FOR INDONESIA TO INDIA WERE RATING AT AROUND $7500-8000 A DAY
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose slightly and ending in a positive note this past wee ...
Friday, 04 November 16
U.S COAL PRODUCTION UP WEEK OVER WEEK
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 17 million short tons ...
Friday, 04 November 16
INDONESIAN INFRASTRUCTURE DEVELOPMENT TRENDS ARE UNANIMOUSLY AFFIRMED
Press Release: October 20-21, 2016 Indonesia Infrastructure Summit (IIC) opened at the Hyatt Hotel in Jakarta The theme of the meeting was "Pr ...
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- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- Merrill Lynch Commodities Europe
- Bangladesh Power Developement Board
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Planning Commission, India
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- PowerSource Philippines DevCo
- Aboitiz Power Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- The University of Queensland
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Heidelberg Cement - Germany
- Kalimantan Lumbung Energi - Indonesia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Grasim Industreis Ltd - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- The Treasury - Australian Government
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