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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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Thursday, 27 October 16
PANAMAX: FIRM ATLANTIC; TOPPISH PACIFIC - FEARNLEYS
Supramax
The trend from last week is passed on. ECSA still strong with Supras from N Brazil to Med fixed at $9,000 to $9,500 daily.
Accordin ...
Wednesday, 26 October 16
SHIPPING MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
If the finale of a thriller movie finds the leading actor successfully surviving after all the sacrifices he has made, the audience presumes this t ...
Tuesday, 25 October 16
INDONESIAN COAL PRICES MARCH HIGHER CONTINUES
COALspot.com: A rally in thermal coal prices over the past few months, after years of decline, is still continuing and it is expected to rally at l ...
Tuesday, 25 October 16
THINGS ARE SLOWLY STARTING TO IMPROVE AS CORRECTIONS ARE MADE - ALLIED
It seems as though left, right and centre, all we see nowadays is the word “restructuring”.
There is restructuring amongst bankers ...
Monday, 24 October 16
KOMIPO INVITES BIDS FOR 0.78 MILLION TONS OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
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- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Mineral Development Corp Ltd - India
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- The University of Queensland
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Goldman Sachs - Singapore
- India Bulls Power Limited - India
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mercator Lines Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Attock Cement Pakistan Limited
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Energy - Thailand
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Toyota Tsusho Corporation, Japan
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Directorate General of MIneral and Coal - Indonesia
- Planning Commission, India
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
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