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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, 28 July 18
GOVERNMENT TO REVOKE COAL PRICE CAP POLICY - JP
The government plans to revise its domestic market obligation (DMO) on coal price next week during a high-level meeting with President Joko “ ...
Thursday, 26 July 18
A SUPRAMAX IS NOW PAID AROUND USD 21,500 FOR LOADING IN THE US GULF WITH DISCHARGE IN THE FAR EAST - FEARNLEYS
Cape
There has been a relatively strong summer period so far, and there is a strong week we have left behind us.
In the Pa ...
Thursday, 26 July 18
ASEAN COAL IMPORTS INCREASED IN 2Q' 18 COMPARED TO THE PRIOR YEAR; THIS TREND TO CONTINUE AS 56 GIGAWATTS OF NEW COAL PLANTS IN 24 COUNTRIES WORLDWIDE ARE EXPECTED TO COME ONLINE IN 2018 - PEABODY
Peabody announced its second quarter 2018 operating results, including revenues of $1.31 billion, income from continuing operations, net of income ...
Wednesday, 25 July 18
COAL MINER BUKIT ASAM'S PROFIT GROWS 50% IN FIRST HALF - JP
Coal miner Bukit Asam announced 50 percent profit growth to Rp 2.58 trillion (US$177.33 million) in the first half of 2018, on the back of a coal-p ...
Wednesday, 25 July 18
TANKER MARKET INSIGHT - DIMITRIS KOURTESIS
We are now into the second half of 2018, which so far has not been a fruitful year for tankers. With 2020 quickly approaching we need to consider t ...
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Showing 1661 to 1665 news of total 6871 |
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- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Planning Commission, India
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- VISA Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement - Thailand
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Parliament of New Zealand
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- South Luzon Thermal Energy Corporation
- Wilmar Investment Holdings
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- The University of Queensland
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Agrawal Coal Company - India
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Mintek Dendrill Indonesia
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- European Bulk Services B.V. - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
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