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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, 22 September 21
MARKET INSIGHT - INTERMODAL
The unfolding last week of a trilateral defence pact between the United States, Australia, the United Kingdom (AUKUS) envisages a wide range of col ...
Tuesday, 21 September 21
CHINESE COAL IMPORTS FROM AUSTRALIA DROP 98.6% AS RESTRICTIONS BITE - BIMCO
In the first seven months of the year Chinese coal imports from Australia have totalled just 780,000 tonnes as Chinese restrictions on Australian c ...
Tuesday, 21 September 21
CHINA'S COAL OUTPUT RESUMES GROWTH IN AUGUST - XINHUA
China’s raw coal output rose 0.8 percent year on year to 340 million tonnes last month, official data showed.
The growth rate ...
Wednesday, 15 September 21
MARKET INSIGHT - INTERMODAL
Following the oil price sell off during most of August, partly triggered by oil demand fears amid the delta COVID variant, oil prices have resumed ...
Saturday, 11 September 21
CIL STEPS UP SUPPLY COAL TO POWER SECTOR; PER-DAY AVERAGE 20 PC HIGHER THAN LAST YEAR - PTI
State-owned CIL on Friday said it has stepped up the supply of coal to the power sector in the first eight days of the current month, with an avera ...
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- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- Kideco Jaya Agung - Indonesia
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- GAC Shipping (India) Pvt Ltd
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Price Waterhouse Coopers - Russia
- Carbofer General Trading SA - India
- Karaikal Port Pvt Ltd - India
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- The University of Queensland
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Planning Commission, India
- Trasteel International SA, Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- SMC Global Power, Philippines
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- White Energy Company Limited
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Mintek Dendrill Indonesia
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kumho Petrochemical, South Korea
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Borneo Indobara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Gujarat Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
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