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