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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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Tuesday, 01 November 16
IMPROVEMENT ON THE DEMAND SIDE ONLY BUT THE SUPPLY SIDE IS WORSE OFF - BIMCO
Back in May, BIMCO disclosed a projected “road to recovery” for the dry bulk shipping industry. The main message back then on what the ...
Monday, 31 October 16
INDONESIAN 5000 GAR COAL ROSE 5.56% WEEK OVER WEEK - CS COAL INDEX
COALspot.com: The price for thermal coal has recovered substantially since April 2016. The China’s new policy on its domestic coal miners, th ...
Friday, 28 October 16
STEAM COAL IMPORTS: CHINA AND INDIA'S ROLE REVERSALS - BEN TRIMMEL
While a sharp decline in European imports is a key driver of the expected fall in steam coal trade this year, China and India remain leading actors ...
Friday, 28 October 16
U.S. WEEKLY COAL OUTPUT ROSE DURING THE WEEK ENDING OCTOBER 22 - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16.5 million short ton ...
Thursday, 27 October 16
73.08 PERCENT OF COAL PRODUCERS PREDICTED INDIA WILL NOT STOP COAL IMPORTS IN 2 TO 3 YEARS - POLL
COALspot released its weekly opinion poll "How likely do you think India will STOP thermal coal imports in 2-3 years?" this Monday.
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- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Marubeni Corporation - India
- PTC India Limited - India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Port Waratah Coal Services - Australia
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ministry of Transport, Egypt
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Finance - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- GMR Energy Limited - India
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Metalloyd Limited - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Wilmar Investment Holdings
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
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