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Tuesday, 16 June 20
HIGHER IRON ORE PRICES OFFSET CORONAVIRUS-DRIVEN PRODUCTION RISK - FITCH RATINGS
 Lower iron ore production in Brazil, resulting from rising coronavirus infections, should only marginally affect the cash flow of Vale and other global mining companies due to higher prices, says Fitch Ratings. More than 10% of Vale’s production was affected last week when a local court suspended operations at its Itabira Complex due to employees testing positive for the virus.
Iron ore prices declined earlier this year due to demand concerns but later rebounded and are being supported by supply constraints caused by Vale’s 2019 dam accident and weather-related production disruptions. Prices increased to above USD100/dry metric ton (dmt) due to the news regarding the suspension.
Vale maintained its 2020 production guidance at 310 metric tons (mt) to 330mt with production expected to resume once all employees are tested and the company ensures no infected workers are working at the facilities. CRU Group believes it will be increasingly difficult for Vale to meet volume guidance considering the suspension, weak production in the Northern System and the effect heavy rainfall had on output at the start of 2020. The potential for additional infections increases employee absenteeism and production risk, as the number of people available to work in mines and processing plants falls, and other municipalities could take similar actions to stem the spread of the virus.
Material Environmental, Social and Governance (ESG) shortcomings, particularly in the areas of executing strategy and maintaining the well-being of employees, constrain Vale’s ‘BBB-’ credit ratings with a Stable Outlook. However, Vale is a low-cost producer with a leading market position, abundant reserves, and high-grade iron that commands a market premium, which reduces credit implications.
Fitch projects Vale will generate more than USD14 billion of EBITDA in 2020, assuming iron ore prices average USD75/dmt. FCF should be about USD5.0 billion, assuming capex is about USD4.7 billion and dividends are USD3.0 billion. Vale’s 2020 net debt/EBITDA is projected to be around 0.5x. These forecasts compare with USD17 billion of EBITDA, USD7 billion of FCF and net debt/EBITDA of 0.3x for the LTM ended March 31. Forecasts could prove conservative, given the rise in iron ore prices.
Similar dynamics apply to Anglo American’s operations at Minas-Rio. Fitch used for its rating case the bottom of existing production guidance of 22 million tonnes – 24 million tonnes and a price assumption of USD75/tonne in 2020 for the 62% Fe benchmark cost and freight (CFR) China price. The company has scheduled a one month production stoppage for inspection of its slurry pipeline for second-half 2020. If there were any pandemic-related disruptions in the coming months it might be possible to use the slot to re-schedule the maintenance work. Overall, based on production figures to date, upside from actual prices realized and material Brazilian real depreciation, there is unlikely to be any cash flow downside for the earnings outlook from a temporary disruption, if it occurs at Minas-Rio, to the existing rating case.
CRU’s forecast for benchmark 62% Fe fines CFR China is USD80/dmt as of May 2020. Iron ore demand in China remains robust as rising steel prices and margins for hot rolled coil producers above 10% encourage steel production. CRU expects strong steel production ahead of the wet season in southern China, which typically slows demand from the construction sector. Steel mills in China continue to operate with exceptionally low inventories and recent data shows mill inventories are declining further while port stocks remain steady at 108mt.
Source: Fitch Ratings
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Tuesday, 09 June 20
INDIA: COAL IMPORT DROPS BY 20% TO NEARLY 19 MILLION TONNES IN MAY, SAYS REPORT - HINDUSTAN TIMES
The country’s coal import dropped by 20 per cent to 18.93 million tonnes (MT) last month, industry data showed.
The government ...
Monday, 08 June 20
WOOD MACKENZIE: THE INDISPENSABLE OPEC+
Rumours of “the death of OPEC” have been circulating for almost as long as the organisation has existed. Just three years after the car ...
Monday, 08 June 20
CHINA'S COAL IMPORTS FALL NEARLY 20% IN MAY EVEN AS DEMAND RISES - REUTERS
China’s coal imports in May fell nearly 20% compared with a year earlier even as demand recovered at power plants and industrial users, custo ...
Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Sunday, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
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- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- MS Steel International - UAE
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- IHS Mccloskey Coal Group - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Coastal Gujarat Power Limited - India
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Planning Commission, India
- Minerals Council of Australia
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Pendopo Energi Batubara - Indonesia
- Price Waterhouse Coopers - Russia
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Energy Development Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Orica Mining Services - Indonesia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Australian Coal Association
- Economic Council, Georgia
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Kobexindo Tractors - Indoneisa
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Sidhee Cement - India
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- IEA Clean Coal Centre - UK
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