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