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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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Wednesday, 03 October 18
SHIPPING MARKET INSIGHT - KATERINA RESTIS
The bunker fuel supply and availability landscape is close to its transformation with the enforcement of the IMO’s global 0.5% fuel Sulphur c ...
Tuesday, 02 October 18
PANAMAX: A FURTHER RISE ACROSS ALL MAIN ROUTES THIS WEEK - ALLIED
Capesize
Finally an upward recovery was in sight in the spot market the past few days, after the prolonged negative pressure noted the weeks pr ...
Tuesday, 02 October 18
THE PRICE OF OIL CONTINUES ITS CLIMB AMIDST A SERIES OF CONCERNS REGARDING SUPPLY CONSTRAINTS - GEORGE LAZARIDIS
It has been a busy week for oil traders as the price of oil continues its climb amidst a series of concerns regarding supply constraints.
...
Tuesday, 02 October 18
INDONESIA GETS READY TO MEET INCREASED COAL DEMAND FROM CHINA, FREIGHT TO RESPOND - MIKAL BOE
Indonesian coal suppliers have increased their domestic coal production target by 4.5 percent from a previous 485 million tonnes to a massive 507 m ...
Monday, 01 October 18
SUPRAMAX: A 56,000 DWT FIXED DELIVERY FOR A SURABAYA TRIP WITH REDELIVERY TO WEST COAST INDIA AT $13,500 - THE BALTIC BRIEFING
Capesize
A stop-start market for the big ships with many expectations and few fulfilled. Holidays curtailed trading early in the week, but the ...
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Showing 1601 to 1605 news of total 6871 |
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- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Jindal Steel & Power Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Cement Manufacturers Association - India
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- The University of Queensland
- Economic Council, Georgia
- Central Electricity Authority - India
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Borneo Indobara - Indonesia
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Tata Chemicals Ltd - India
- Standard Chartered Bank - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
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