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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, 11 December 18
SHIPPING MARKET ANALYSIS - ALLIED
A lot of discussions have been made as to the effects of the IMO 2020 regulation on OPEX levels, investment feasibility of& ...
Tuesday, 11 December 18
PORT OF NEWCASTLE SHIPPED 10.849 MMT OF COAL IN NOVEMBER DOWN 23.44 PERCENT MOM
COALspot.com: The Port of Newcastle, Australia’s major trading port and the world’s largest coal export port has shipped A$ 1,574.8 mil ...
Thursday, 06 December 18
IN THE EAST, BIGGER SUPRA WAS FIXED CA US$ 10K FOR INDO-CHINA COAL ROUND - FEARNLEYS
Capesize
There is cautious optimism for the Capes, with healthier volumes and improving rates in the Pacific. West Australia round is gradually ...
Thursday, 06 December 18
U.S. COAL CONSUMPTION IN 2018 EXPECTED TO BE THE LOWEST IN 39 YEARS - EIA
EIA expects total U.S. coal consumption in 2018 to fall to 691 million short tons (MMst), a 4% decline from 2017 and the lowest level since 1979. U ...
Thursday, 06 December 18
DEMAND RISKS WEIGH ON GLOBAL SHIPPING SECTOR OUTLOOK - FITCH RATINGS
The global shipping sector outlook remains negative reflecting the demand-side risks of protectionism and slower economic growth, Fitch Ratings say ...
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Showing 1536 to 1540 news of total 6871 |
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- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- Electricity Generating Authority of Thailand
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Mercator Lines Limited - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Coalindo Energy - Indonesia
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Planning Commission, India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Bharathi Cement Corporation - India
- The University of Queensland
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
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