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Tuesday, 24 August 21
COAL PRICE RALLY TO PRESSURE CHINESE POWER GENCOS’ MARGINS FITCH RATINGS
Fitch RatingsFitch Ratings expects the pressure on Chinese power generation companies’ (gencos) profit from the recent coal price surge to weaken their credit metrics in 2021. However, the magnitude may vary as they have different risk exposure to coal-price fluctuations from factors such as fuel mix, business and geographical diversification, degree of integration and coal procurement strategy.
 
The Chinese benchmark Qinhuangdao 5,500 kcal/kg coal price surged 66% yoy to CNY942/tonne by end-July 2021. Power gencos with higher capacity contribution from coal-fired power and less integration into the coal-mining business are more vulnerable to the coal price rally.
 
However, their coal procurement strategies may partly mitigate the adverse impact. Some power gencos maintain a high share of procurement via long-term contracts, which, to some extent, can mitigate their lack of a natural hedge from having an upstream coal-mining business. Power gencos in coastal regions also use more imported coal, which is generally cheaper than domestic coal, while power gencos with assets in proximity to low-cost inland coal mines benefit from lower coal price volatility and transport costs.
 
Fitch expects rated Chinese power gencos’ leverage to rise in 2021 due to lower operating cash flow, reflecting the coal-price-driven profit decline, and higher capex to fund renewable investments. We expect most of the rated gencos’ Issuer Default Ratings (IDR) to remain intact due to their status as government-related entities or subsidiaries with IDRs linked directly or indirectly to the creditworthiness of their local governments under a top-down approach based on our Government-Related Entities Rating Criteria. However, standalone credit profile headroom for some entities may be reduced due to the elevated leverage.


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Saturday, 11 September 21
CIL STEPS UP SUPPLY COAL TO POWER SECTOR; PER-DAY AVERAGE 20 PC HIGHER THAN LAST YEAR - PTI
State-owned CIL on Friday said it has stepped up the supply of coal to the power sector in the first eight days of the current month, with an avera ...


Saturday, 11 September 21
RECORD CHINESE COAL FUTURES SIGNAL NEED TO BOOST OUTPUT - REUTERS
China’s coal prices have climbed to a record high, signaling the need for more production in the short term, even as the government tries to ...


Saturday, 11 September 21
IN 2022, EIA EXPECTS U.S. COAL PRODUCTION TO INCREASE BY 47 MMST TO 648 MMST
U.S. Coal production accordng to EIA's forecast, totals 601 million short tons (MMst) in 2021, 66 MMst more than in 2020, EIA's Short-Term ...


Wednesday, 08 September 21
FITCH RATINGS RAISES THERMAL COAL PRICE ASSUMPTIONS ON TIGHT SUPPLY
Fitch Ratings has increased all its Qinhuangdao 5,500kcal/kg price assumptions and short- and medium-term Newcastle 6,000kcal/kg price assumptions ...


Wednesday, 08 September 21
COAL IS STILL KING; INDONESIAN COAL PRICE REFERENCE ABOVE $150 FOR FIRST TIME IN HISTORY
COALspot.com: The Indonesian Coal Price Reference rose dramatically from US$ 127.05 in February 2011, to a peak of US$ 150.03 in September 2021, be ...


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