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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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Friday, 21 January 22
CHINA'S POWER TRADING TARIFFS TO RISE IN 2022 - FITCH RATINGS
Rising trading volume and higher-than-benchmark tariffs in the 2022 bilateral contracts signed between Chinese power generation companies (gencos) ...
Thursday, 20 January 22
CHINESE COAL JUMPS OVER 6% ON PRE-HOLIDAY SUPPLY WORRY - REUTERS
China’s thermal coal futures soared more than 6% on Wednesday, hitting a level last seen in late November as investors grew concerned over ti ...
Thursday, 20 January 22
VIETNAM: COAL SECTOR SEES POSITIVE PROSPECT IN 2022 - VNA
With many signs of rising demand for coal in various economic sectors in 2022, the Vietnam National Coal – Mineral Industries Group (Vinacomi ...
Wednesday, 19 January 22
MARKET INSIGHT - INTERMODAL
Since the beginning of the year, we have been witnessing the BDI correcting downwards with sizable drops across all segments. Latest similar levels ...
Sunday, 09 January 22
INDONESIA MINISTER SAYS 'EMERGENCY OVER' ON COAL SUPPLY CRUNCH - REUTERS
Indonesia’s power emergency which has triggered a coal export ban is over but the government will still continue to discuss policies in this ...
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- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- London Commodity Brokers - England
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Energy Development Corp, Philippines
- VISA Power Limited - India
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Banpu Public Company Limited - Thailand
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- The University of Queensland
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Bhoruka Overseas - Indonesia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Sical Logistics Limited - India
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
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