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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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Monday, 29 October 18
IMPLEMENTATION OF SULPHUR 2020 LIMIT - CARRIAGE BAN ADOPTED - IMO
An amendment to support consistent implementation of the forthcoming 0.50% limit on sulphur in ships fuel oil was adopted by the International Mari ...
Monday, 29 October 18
SUPRAMAX: THE ASIAN AREA SAW FALLING RATES, WITH A 61,000DWT FIXING DELIVERY KOHSICHANG TRIP VIA INDONESIA, REDELIVERY INDIA, AT $10,500 - BALTIC BRIEFING
Capesize
A market of two halves for most of the week with rates in the Atlantic firming and easing in the East for most of the week, but then, ...
Friday, 26 October 18
SHIP OPERATING COSTS EXPECTED TO RISE IN 2018 AND 2019 - MOORE STEPHENS
Total vessel operating costs in the shipping industry are expected to rise by 2.7% in 2018 and by 3.1% in 2019, according to our latest survey.
...
Friday, 26 October 18
SEVERAL CONTRACTIONS IN GLOBAL STEEL PRODUCTION - JEFFREY LANDSBERG
World Steel Association data released today shows that global crude steel production totaled approximately 151.7 million tons in September. T ...
Thursday, 25 October 18
WHAT DOES THE "IMO 2020" REGULATION REALLY SAY? A QUICK GUIDE - BIMCO
KNOWLEDGE TO ELEVATE
The shipping industry has all eyes firmly fixed on the topic, but what exactly do the “IMO 2020” global sulph ...
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Showing 1576 to 1580 news of total 6871 |
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- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Edison Trading Spa - Italy
- White Energy Company Limited
- Sarangani Energy Corporation, Philippines
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Mercuria Energy - Indonesia
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Rio Tinto Coal - Australia
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Essar Steel Hazira Ltd - India
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Simpson Spence & Young - Indonesia
- Therma Luzon, Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Planning Commission, India
- Commonwealth Bank - Australia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Parliament of New Zealand
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Coal Association
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Star Paper Mills Limited - India
- San Jose City I Power Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- PTC India Limited - India
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Orica Australia Pty. Ltd.
- Electricity Authority, New Zealand
- Eastern Energy - Thailand
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
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