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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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Wednesday, 12 September 18
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
A recovery in the shipping market since last year has buoyed optimism amongst the people in the industry. Yet if you are to ask most ship-owners if ...
Monday, 10 September 18
HANDYSIZE: PERIOD ACTIVITY REMAINED LIMITED WITH A 37,000DWT REPORTEDLY FIXED FOR FOUR TO SIX MONTHS AT $10,500, OPEN IN MALAYSIA IN MID-SEPTEMBER - BALTIC BRIEFING
Capesize
Rates came under pressure for the big ships last week, despite paper values holding at reasonable levels as these trades continued to ...
Thursday, 06 September 18
INDONESIAN COAL PRICE REFERENCE FALLS FOR FIRST TIME IN 3 MONTHS
COALspot.com: The benchmark price of Indonesian thermal coal falls for first time in three months.
According to the latest min ...
Thursday, 06 September 18
SUPRAMAX: SE ASIA-INDO ROUNDS WITH COAL HAVE BEEN CONCLUDED IN THE $13000S RANGE - FEARNLEYS
Capesize
The big ships experiencing a bump in the road towards what is commonly expected to be by far the best period of this year. Average dai ...
Wednesday, 05 September 18
ASIAN DEMAND COULD CREATE DEFICIT IN GLOBAL LNG MARKET - FITCH RATINGS
Growing gas demand from Asia, particularly from China, could swing the liquefied natural gas (LNG) market into a deficit by 2022-2025, Fitch Rating ...
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Showing 1626 to 1630 news of total 6871 |
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- Energy Link Ltd, New Zealand
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Larsen & Toubro Limited - India
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Agrawal Coal Company - India
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Electricity Authority - India
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Africa Commodities Group - South Africa
- Uttam Galva Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- PTC India Limited - India
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- The University of Queensland
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
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