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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, 01 October 18
A NO-DEAL BREXIT WILL UNDOUBTEDLY HAVE CONSEQUENCES FOR IMPORTERS AND EXPORTERS - KATE JONES, THE BALTIC BRIEFING
If you live in the UK, you might be finding it difficult to get away from the Brexit debate. “Hard Brexit”, “soft Brexit”, ...
Friday, 28 September 18
INDONESIA 2018 COAL OUTPUT TARGET NOW AROUND 507 MLN T - ENERGY MINISTRY : REUTERS
Indonesia has increased its 2018 coal production target to around 507 million tonnes from a previous target of 485 million tonnes, the Energy Minis ...
Wednesday, 26 September 18
IS YOUR CHARTER PARTY READY FOR 2020? - METTE KRONHOLM FRAENDE, BIMCO
As the deadline for the IMO’s global low-sulphur fuel requirements fast approaches, it is necessary to carefully check the bunker clauses in ...
Wednesday, 26 September 18
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Despite the fact that the dry bulk SnP market saw an admittedly busy summer season, there is a noticeable slowdown in activity during the past thre ...
Tuesday, 25 September 18
THE INCONVENIENT TRUTH OF RISING COAL PRICES - FORBES
Coal prices are not supposed to be rising as governments tighten environmental controls but that’s precisely what is happening at the premium ...
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Showing 1606 to 1610 news of total 6871 |
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- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Merrill Lynch Commodities Europe
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Planning Commission, India
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- The University of Queensland
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- London Commodity Brokers - England
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- White Energy Company Limited
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Bhoruka Overseas - Indonesia
- PTC India Limited - India
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Star Paper Mills Limited - India
- Malabar Cements Ltd - India
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Attock Cement Pakistan Limited
- ICICI Bank Limited - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
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