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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, 22 September 18
SHIPOWNERS URGENTLY NEED A FUEL-MANAGEMENT PLAN - METTE KRONHOLM FRAENDE, BIMCO
With the majority of ship operators expected to choose low-sulphur fuel over scrubbers to comply with the new IMO sulphur cap regulation, all eyes ...
Saturday, 22 September 18
GERMANY'S MOVE TO SCRAP COAL WILL COST TAXPAYERS - BRIAN PARKIN | WILLIAM WILKES
Chancellor Angela Merkel’s plan to close Germany’s remaining coal-fired power stations will drive up subsidies for regions that mine th ...
Saturday, 22 September 18
FITCH RATINGS: WORLD GROWTH FORECAST CUT ON US-CHINA TRADE BATTLE
Protectionist US trade policies have now reached the point where they are materially affecting what remains a strong global growth outlook, with th ...
Tuesday, 18 September 18
COOLING OUTLOOK FOR COAL - KATE JONES
At a time of increasing focus on the renewables market as the world seeks to clean up its act to prevent climate change, what is the outlook like f ...
Monday, 17 September 18
GLENCORE RETURNS TO JAPAN COAL TALKS SCUPPERED BY HIGH PRICES - BLOOMBERG
Mining giant Glencore Plc and Japanese utilities have resumed thermal coal supply negotiations, restarting talks that fell apart earlier this year ...
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Showing 1611 to 1615 news of total 6871 |
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- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bayan Resources Tbk. - Indonesia
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Simpson Spence & Young - Indonesia
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Aditya Birla Group - India
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Barasentosa Lestari - Indonesia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Economic Council, Georgia
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Ind-Barath Power Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Minerals Council of Australia
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Energy Link Ltd, New Zealand
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
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