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Friday, 28 September 18
FITCH RATINGS: METALLURGICAL COAL MINERS MAY CURB COSTS AS PRICES SLIP
Strong cost inflation in the global metallurgical coal sector suggests that miners may focus on cost controls as prices decline from their current high levels over the next 18 months, say Fitch Ratings and CRU. However, mining companies rated by Fitch are well-positioned for any potential squeeze on margins, as their costs are relatively low by global standards and, in most cases, their diversified business operations limit exposure to the sector.
CRU estimates that global costs in the metallurgical coal sector increased by 18% in 2017 and continued to rise in 2018. Severe weather has played a role in Australia, causing supply-chain disruption that led to demurrage penalties and increased storage costs for unshipped coal. However, costs have also been pushed up globally by higher oil prices and attempts by mining companies to maximise production to take advantage of high prices.
Coking coal prices are currently sufficiently high that cost inflation has not undermined profitability. CRU estimates that the seaborne industry generated an average cash margin of 40% in 2016-2017, and profitability has remained very strong this year.
The metallurgical coal market is unlikely to become oversupplied in the near term, and Fitch does not expect prices to fall deep into the cost curve, as they did during 2014-2016. However, prices have already eased off from their peak of USD260/tonne in 4Q16, and are likely to decline further as supply constraints continue to ease. Fitch’s current assumptions are that hard coking coal prices will average USD185/tonne this year and USD140/tonne thereafter. These declines could put pressure on some less competitive mining companies to reduce costs to protect margins.
Among Fitch-rated companies, Teck Resources (BB+/Positive) has the largest exposure to the metallurgical coal sector, which accounted for 60% of its segment EBITDA in the 12 months to 30 June 2018. The company is among those that have increased use of contractors and rented more mining equipment to raise short-term output, which has pushed up marginal costs. Nevertheless, Teck is still in the lower half of the global cost curve (FOB port) and its costs remain lower in US dollar terms than in 2014. Teck has also taken advantage of strong margins and cash flow to reduce leverage. The main credit issue facing the company is the prospect of continued project spending and its funding resulting in weaker cash flows and higher financial leverage.
BHP Billiton (A/Stable) and Anglo American (BBB-/Stable) also have significant metallurgical coal assets, mostly located in Australia, where coal mines are generally relatively low cost by global standards. BHP and Anglo also have diversified operations, with metallurgical coal accounting for only around 16% of BHP Billiton’s revenue and 17% of Anglo’s in the financial year ending June 2017. There could be increased focus on improving efficiency in the Australian coal sector, as already signalled by some companies, but CRU and the Australian government expect production to continue to grow strongly over the next four years.
Meanwhile, mining service companies and earthmoving equipment manufacturers should continue to benefit from rising demand and a better pricing environment as miners continue with new projects and increase production. Emeco (B/Stable), which has the largest exposure to metallurgical coal among Fitch-rated companies, reported improved EBITDA margin as the commodity sector recovered. It also improved its leverage position. Further leverage improvements are likely in 2019-2021 due to equity-funded acquisitions and a tight rental equipment market in Australia.
Source: Fitch Ratings
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Tuesday, 18 December 18
COAL OUTLOOK BULLISH DESPITE WEAK CHINESE IMPORT DATA - HEREN, ICIS
Coal prices may appreciate over the remainder of 2018 even despite recent data showing falling imports from the world’s largest producer and ...
Tuesday, 18 December 18
TOBA BARA ACQUIRES SHARES OF PT BATU HITAM PERKASA
PT Toba Bara Sejahtra Tbk, through its subsidiary PT Toba Bara Energi (“TBE”), has acquired shares ...
Monday, 17 December 18
SUPRAMAX THERE WAS STRONGER DEMAND FROM SOUTHEAST ASIA, WITH MORE COAL BEING SHIPPED - BALTIC BRIEFING
Capesize
A positive end to last week after a somewhat uncertain start as some gains made were eroded. Rates recovered later for West Australia/ ...
Monday, 17 December 18
SOUTH KOREA STATE-OWNED UTILITY KOREA EAST-WEST POWER CO. LTD ISSUED A TENDER FOR MAX 3.220 MILLION TONS OF 4200 TO 5900 NAR COAL
COALspot.com: South Korea state-owned utility Korea East-West Power Co. Ltd (EWP) issued a tender for max 3,220,000 Metric Tons of coal to be loade ...
Saturday, 15 December 18
COMING CHANGES IN MARINE FUEL SULFUR LIMITS WILL AFFECT GLOBAL OIL MARKETS - EIA
International regulations limiting sulfur in fuels for ocean-going vessels, set to take effect in January 2020, have implications for vessel operat ...
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Showing 1526 to 1530 news of total 6871 |
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- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- PetroVietnam Power Coal Import and Supply Company
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Grasim Industreis Ltd - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Australian Coal Association
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- The University of Queensland
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- Energy Link Ltd, New Zealand
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Economic Council, Georgia
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
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