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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, 17 September 18
SMALL PERCENTAGE OF THE WORLD FLEET WILL FIT SCRUBBERS - FORECASTS : METTE KRONHOLM FRAENDE
In recent months, there have been numerous reports of a strong pick-up in demand for scrubbers. On 1 January 2020, however, the number of ships fit ...
Saturday, 15 September 18
POWERING SUSTAINABLE DEVELOPMENT WITH LOW EMISSION COAL TECHNOLOGIES - WCA
In its 5th Strategic Energy Plan this year (2018), the Japanese Cabinet recognised coal as an important energy resource, necessary for the country& ...
Friday, 14 September 18
10 YEARS ON FROM LEHMAN, HOW IS SHIPPING'S "HANGOVER"? - CLARKSONS RESEARCH
On 15th September 2008, the collapse of Lehman Brothers crystallised the financial crisis and the onset the worst economic downturn for a century. ...
Thursday, 13 September 18
OPEC SEES SLOWER 2019 OIL DEMAND GROWTH, WARNS ON ECONOMY
Crude Oil Price Movements
In August, the OPEC Reference Basket declined by $1.01 m-o-m, settling at $72.26/b. Crude oil futures were also down ...
Thursday, 13 September 18
SUPRAMAX: INDO-INDIA COAL RUN WAS FIXED CLOSE TO $16000 ON ULTRA - FEARNLEYS
Capesize
Rates took a further drop in the beginning of the week, to later find a floor around mid-week reaching mid USD 7 level for c5 and just ...
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Showing 1616 to 1620 news of total 6871 |
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- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Singapore Mercantile Exchange
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Africa Commodities Group - South Africa
- GMR Energy Limited - India
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Parliament of New Zealand
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Vizag Seaport Private Limited - India
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