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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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Wednesday, 28 September 16
WITHOUT A DOUBT FREIGHT RATES HAVE MOVED UP A BIT TO HEALTHIER LEVELS - INTERMODAL
As we are approaching Q4, it is interesting to perform a review of the last nine months with respect to the second-hand prices of Supramax and Pana ...
Tuesday, 27 September 16
THE CAPESIZE RATE OF INCREASE HAS BEEN IMPRESSIVE, UP 39% W/W AND 123% MONTH TO DATE - ALLIED
The Dry bulk market has seen a rare shine in its performance as the capesize sector manages to rally at an unprecedented rate compared to its perfo ...
Monday, 26 September 16
COAL PRICES HAVE BEEN MOVING STEADILY HIGHER AFTER YEARS OF DECLINE
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 ...
Monday, 26 September 16
THE FREIGHT MARKET WAS FIRM; ALL SEGMENTS WERE UP THIS PAST WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose and ending in a positive note this past week. The BD ...
Friday, 23 September 16
"COLLATERAL LIES" DO NOT NECESSARILY UNDERMINE AN INSURANCE CLAIM
KNOWLEDGE TO ELEVATE
An insured was not precluded from recovering under an insurance policy even though it had made a false statement during t ...
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- Coal and Oil Company - UAE
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- GN Power Mariveles Coal Plant, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Economic Council, Georgia
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Merrill Lynch Commodities Europe
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Indian Energy Exchange, India
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Global Green Power PLC Corporation, Philippines
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
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