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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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- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parliament of New Zealand
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Cement Manufacturers Association - India
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Parry Sugars Refinery, India
- Singapore Mercantile Exchange
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- London Commodity Brokers - England
- Heidelberg Cement - Germany
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Jindal Steel & Power Ltd - India
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Xindia Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
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