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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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Saturday, 20 October 18
PANAMAX: THE PACIFIC SAW A LARGE VOLUME OF FIXING, WITH INDONESIA AGAIN THE DRIVING FORCE - THE BALTIC BRIEFING
Capesize
A positive end to last week after a shaky start, with a Coaltrans taking participants out of the market early on and with rates slippi ...
Thursday, 18 October 18
SUPRAMAX: INDO/WC INDIA SUPRAS ARE FIXING AROUND MID $14000S P/D BASIS SPORE DELIVERY
Capesize
The volatile Cape market continues this week, especially in the Pacific says Fearnleys in its latest weekly report.
...
Thursday, 18 October 18
COAL SHORTAGE HITS POWER SECTOR AGAIN; HOW INDIA CAN GET ITS PRODUCTION RIGHT - ANIL SWARUP
By convincing states of the value proposition of increased production, the record production of Fy15 & Fy16 can be emulated.
The ...
Thursday, 18 October 18
CHINA POWER REFORM NEUTRAL ON GRIDS, PRESSURES IPP MARGINS - FITCH RATINGS
China's power sector reform has a broadly neutral impact on transmission grids although it will pressure the power producers' margins, says ...
Wednesday, 17 October 18
ESCROW SERVICE FOR BALTIC MEMBERS NOW LIVE
The Baltic Exchange’s Escrow Service for its members to hold deposits for ship sale transactions goes live today (15 October). The service is ...
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Showing 1586 to 1590 news of total 6871 |
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- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- LBH Netherlands Bv - Netherlands
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Australian Commodity Traders Exchange
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Australian Coal Association
- Indonesian Coal Mining Association
- The University of Queensland
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Thai Mozambique Logistica
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
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