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Thursday, 23 September 21
RECORD-HIGH GAS PRICES AFFECT MANY EUROPEAN CORPORATE SECTORS - FITCH RATINGS
 Record-high natural gas prices are putting pressure on supply chains of many European corporate sectors, including non-integrated energy suppliers, fertiliser producers and consumer goods companies, Fitch Ratings says. Smaller companies in these industries are under the most pressure, while larger and more diversified issuers rated by Fitch are better positioned to mitigate the impact. Gas prices could remain high until the end of the winter heating season, given low levels of natural gas in European storage facilities. However, we expect prices to moderate once seasonal demand reduces.
High gas prices and working capital fluctuations have already caused several non-integrated UK gas suppliers (not rated by Fitch) to ask for state support in fulfilling their supply obligations to customers.
The Spanish government has introduced a levy on low-carbon power producers to support smaller suppliers.
Supply is typically a small part of larger Fitch-rated integrated utilities in Europe, which are able to pass costs on to most customer groups, or hedge. Although we expect higher gas prices to increase regulatory risks, the rated utilities’ diversification by jurisdiction and business line, including electricity production and distribution networks, cushions the impact. The unfolding situation in the European gas market may further accelerate the energy transition in the utility sector towards renewables.
Fertiliser producers have been severely affected by rising gas prices. Gas is a key input in ammonia production, which is further used in urea and DAP production. Several ammonia plants in Europe have cut their output or have temporarily shut down operations. Larger Fitch-rated fertiliser producers with a global presence are able to continue production in other regions or source ammonia from third parties, limiting the impact. Producers may also seek to increase fertiliser prices to pass costs onto consumers.
Agriculture and food producers are affected by challenges in the fertiliser sector. Agribusinesses may face shortages in fertiliser supplies and increased prices, most likely increasing their costs in the next season’s harvest. However, meat processors and carbonated drinks manufacturers, particularly in the UK, already face disruptions due to CO2 shortages, which is a by-product of ammonia manufacturing and is used in meat and fizzy drinks production. Geographically diversified food and beverages producers are better positioned to mitigate such shortages.
The record-high prices in Europe are driven by increased demand (due to the wider economic recovery and weather-related factors), competition with Asia for LNG, and a limited supply response from Gazprom, Europe’s largest supplier, providing about a third of Europe’s gas. Prices have also risen due to market fears of a gas deficit during the winter heating season due to low European storage utilisation compared to previous years.
Utilisation at Gazprom-linked storage facilities (around 10% of European capacity) is particularly low, affecting average utilisation rates in Austria, Germany and the Netherlands. Furthermore, unlike September in recent years, Gazprom has not offered any meaningful volumes for delivery this or next year via its electronic sales platform (a sales channel for short-term gas deliveries, used in addition to sales under long-term contracts). Gazprom’s total exports should increase in 2021 but this is unlikely to be sufficient to re-balance the market. Starting the new Nord Stream 2 pipeline, which is facing difficulties in obtaining necessary approvals from regulators in Europe, may affect the availability of additional gas volumes.
We have recently increased our short-term gas price assumptions. However, we expect a normalisation of demand and potential additional supplies to result in a return to mid-cycle pricing from 2023.
Source: Fitch Ratings
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Thursday, 26 August 21
INDIA IMPORTED 17.06 MLN TONNES OF LPG IN 2020; UP 11.5% Y-O-Y
Global LPG trade remained fairly positive in 2020, despite the global economic impact from COVID-19, and surged strongly in the first half of 2021. ...
Thursday, 26 August 21
MARKET INSIGHT - INTERMODAL
24th of August 2021, the Baltic Dry Index reached 4,201, a YTD high and the highest since May 2010.
Cape 5TC daily average @ 51,472
...
Tuesday, 24 August 21
COAL PRICE RALLY TO PRESSURE CHINESE POWER GENCOS’ MARGINS FITCH RATINGS
Fitch Ratings expects the pressure on Chinese power generation companies’ (gencos) profit from the recent coal price surge to weaken their cr ...
Tuesday, 24 August 21
TIGHT POWER SUPPLY IN CHINA AMID STRONG DEMAND, HIGH COAL PRICES - FITCH RATINGS
China experienced tight power supply in 1H21 on stronger than expected power demand as economic activity continued to recover, Fitch Ratings says i ...
Monday, 23 August 21
CHINESE COAL PRODUCTION RISES 4.9 PCT IN 1ST 7 MONTHS OF 2021 - NBS
Official figures demonstrated that the Chinese raw coal production surged 4.9 percent annually to 2.26 billion tonnes in the January-July period of ...
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- Singapore Mercantile Exchange
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- ASAPP Information Group - India
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Central Electricity Authority - India
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Indian Energy Exchange, India
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Aditya Birla Group - India
- Bhatia International Limited - India
- Goldman Sachs - Singapore
- Ministry of Transport, Egypt
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
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