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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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Wednesday, 28 July 21
MARKET INSIGHT - INTERMODAL
Assessing the ship repair sector during this first half of the year, we continue to come across surprises and new restrictions which are trembling ...
Saturday, 24 July 21
UNDERSTANDING INDIA'S LATEST PEAK POWER DEMAND RECORD - IEEFA
Ramping up solar will be crucial as peak power demand hits during the day
At around noon on 7 July 2021, India’s instantaneous ...
Wednesday, 21 July 21
MARKET INSIGHT - INTERMODAL
Dry Buk Sales and Purchase activity has heated up during 2021, reaching record high levels during the first half of the year. The increased interes ...
Monday, 19 July 21
CHINA'S COAL OUTPUT UP 6.4 PCT IN H1 - XINHUA
China’s raw coal output climbed 6.4 percent year on year to 1.95 billion tonnes in the first six months of the year, official data showed.
...
Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
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- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Xindia Steels Limited - India
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- PNOC Exploration Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- The Treasury - Australian Government
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Finance - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Australian Coal Association
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- VISA Power Limited - India
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- GMR Energy Limited - India
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Attock Cement Pakistan Limited
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
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