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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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- Larsen & Toubro Limited - India
- Independent Power Producers Association of India
- Thiess Contractors Indonesia
- Planning Commission, India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Parliament of New Zealand
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Jindal Steel & Power Ltd - India
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Mercuria Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- The University of Queensland
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- CNBM International Corporation - China
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Orica Mining Services - Indonesia
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
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