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