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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, 06 October 21
EUROPEAN COAL FUTURES CLIMB TO 13-YEAR PEAK - REUTERS
European coal futures rose to a 13-year high and physical thermal coal prices were at record highs as rallying gas prices and strong Asian demand f ...
Tuesday, 05 October 21
CAPESIZE MARKET WAS IN A STEEP CLIMB FOR MOST OF THIS WEEK - BALTIC EXCHANGE
Capesize
The Capesize market was in a steep climb for most of this week as it reached a pinnacle of $74,786 Wednesday before stalling, regather ...
Wednesday, 29 September 21
THE WRITING IS ON THE WALL: AUSTRALIA’S COAL ERA IS OVER - YAHOO!FINANCE
As the fringe of Australian politics strives to pump up the coal industry, facts show that coal production has started its long run decline.
&n ...
Wednesday, 29 September 21
SURGING COAL PRICES SPLIT ASIAN BUYERS INTO RICH AND POOR - REUTERS
As seaborne coal in Asia trades at, or near, record highs, there are early signs of demand destruction, especially among price-sensitive buyers suc ...
Wednesday, 29 September 21
MARKET INSIGHT - INTERMODAL
Tanker Asset values have surprised to the upside, despite the downward pressure on the freight market. Tanker rates have been hovering close to the ...
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- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Sojitz Corporation - Japan
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- The University of Queensland
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Bhatia International Limited - India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Australian Coal Association
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- Semirara Mining Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Ambuja Cements Ltd - India
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- Energy Link Ltd, New Zealand
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