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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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Tuesday, 04 September 18
SUPRAMAX: THE ASIAN SECTOR REMAINED ACTIVE WITH RATES STILL FIRM ESPECIALLY IN SE ASIA - BALTIC BRIEFING
Capesize
A turnaround in fortunes for the big ships, with a few slower days in the market. A build-up of tonnage and a lack of Brazil cargoes r ...
Thursday, 30 August 18
SUPRAMAX: CIS COAL TO FAR EAST WENT AT MID TENS AND TO SE ASIA AT CA USD 8000 - FEARNLEYS
Capesize
There was a slow start this week with holiday in UK on Monday. The index has been slowly coming off since then; The C5 route has seen ...
Wednesday, 29 August 18
MID-YEAR FY19 POWER OUTLOOK: IMPORTED COAL REQUIREMENT TO INCREASE DURING REMAINING FY19: IND-RA
India Ratings and Research (Ind-Ra) has maintained a stable-to-negative outlook on the Indian power sector for the remaining FY19, despite a rise i ...
Wednesday, 29 August 18
IMPACT ON CHARTERPARTIES - TIME TO ACT NOW : NORTH P&I CLUB
KNOWLEDGE TO ELEVATE
The challenges introduced by the global sulphur cap are not exclusively technical. The new limits are likely to impact co ...
Tuesday, 28 August 18
COURT CONCLUDES DELIVERY MADE IN ACCORDANCE WITH TERMS OF LOIS - INCE&CO
Glencore Agriculture BV v Navig8 Chemicals Pool Inc (Songa Winds) [2018] EWCA 1901 (Civ)
In this case, the Commercial Court fo ...
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Showing 1631 to 1635 news of total 6871 |
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- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Siam City Cement - Thailand
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- Parliament of New Zealand
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- PTC India Limited - India
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Sical Logistics Limited - India
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Formosa Plastics Group - Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- IHS Mccloskey Coal Group - USA
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Power Finance Corporation Ltd., India
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