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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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Thursday, 06 December 18
CHINA REVISES MANAGEMENT RULES ON ESTABLISHMENT OF FULLY FOREIGN-OWNED SHIPPING BUSINESSES - XINHUA
Foreign shipping companies will find it easier to establish wholly-owned subsidiaries in China thanks to a revised regulation due to take effect on ...
Wednesday, 05 December 18
WORLD COAL PRICES FALL, WITH INDONESIA BENCHMARK FOR DECEMBER, ENDING AT LOWEST SINCE JUNE 2018
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 05 December 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
Is the rise in crude carrier rates driven only by seasonality, or is the recent positive reversal signaling the end of challenging days for the mar ...
Monday, 03 December 18
WCA'S ENGAGEMENT AT COP24 IN KATOWICE - WCA
The 24th Conference of the Parties (COP) to the UN Framework Convention on Climate Change (UNFCCC) will take place from the 2-14 December 2018 in K ...
Monday, 03 December 18
SUPRAMAX: FIXED DELIVERY KALIMANTAN TO WEST COAST INDIA, AT $11000 - THE BALTIC BRIEFING
Capesize
A roller-coaster week for the big ships with hopes soaring at the start for a mini last quarter revival, only to be dashed as the week ...
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Showing 1541 to 1545 news of total 6871 |
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- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Kaltim Prima Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vedanta Resources Plc - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Transport, Egypt
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Agrawal Coal Company - India
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Barasentosa Lestari - Indonesia
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Sinarmas Energy and Mining - Indonesia
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Borneo Indobara - Indonesia
- Power Finance Corporation Ltd., India
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Australian Commodity Traders Exchange
- GVK Power & Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Star Paper Mills Limited - India
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