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Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
 Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited direct near-term credit impact for energy-sector issuers rated by Fitch Ratings, according to the agency. However, the caps highlight that energy companies face mounting political risks that could influence investor perceptions of the sector and capex plans over the long term.
The caps have been proposed for 12 months, but even if they are extended, the direct impact should generally be limited if prices for coal and gas fall over the coming years, in line with Fitch’s base-case assumptions.
The near-term impact on Australian thermal coal miners’ financial profiles will be further mitigated, as typically around 80% of the thermal coal produced in the country is exported, and therefore is not subject to the cap.
The natural gas sector will be more exposed, as domestic demand accounts for a larger share of supply. Santos (BBB/Stable) and Woodside Energy Group (BBB+/Stable) are large suppliers of gas to the domestic market. Such sales account for more than 40% of Santos’s gas production, but we estimate that only around 15% of total production goes to the east coast markets that are exposed to the price cap.
Woodside’s domestic gas sales, including pipeline gas from the NWS Project, Pluto and Wheatstone, account for less than 6% of its gas production, with the rest exported as LNG. For both companies, most gas is already produced under long-term contracts, which will be unaffected by the caps, limiting the near-term impact. The proportion of output affected could nonetheless rise over time if the caps are extended beyond 12 months.
The prevalence of long-term supply contracts will also reduce the impact of the caps for most domestic electricity and gas retailers, including Origin Energy (BBB/Stable). If global energy prices remain high, it is possible that the caps could offer a competitive advantage to some retailers that rely more on short-term supply contracts. That said, the superior sourcing ability and flexibility in contracts should limit downside risks for large retailers. For electricity sales, the highest-cost power generator generally determines the wholesale energy market price, and we anticipate a neutral to marginally positive financial effect for entities like Origin that have flexibility in their generation portfolio.
The price caps will add to a perception that Australia’s mining sector faces mounting political risk, even though we do not believe they will have a major impact on Fitch-rated issuers in the near term. For example, the government has announced plans to implement a new system to protect sites important to Australia’s indigenous peoples. Firms in the sector, as in other parts of the world, also face political risks associated with official efforts to promote the transition to renewable energy sources.
Mounting political risk may influence investors’ perceptions of the sector, and therefore the terms on which companies are able to access finance. This could also have ramifications for M&A plans or long-term capex strategies. Nonetheless, it is likely to take time to assess the impact, which may also be offset by other market developments.
Australia’s parliament on 16 December passed legislation empowering the government to regulate gas prices, alongside an AUD1.5 billion relief package for firms and households. It remains unclear how the relief package will affect power and gas market dynamics, but we expect its impact to be temporary. The authorities plan to cap domestic gas prices at AUD12 per gigajoule. Domestic thermal coal sales prices in New South Wales and Queensland will also be capped at AUD125 per tonne.
Source: Fitch Ratings
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Thursday, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
Thursday, 22 December 22
CHINA TIGHTENS VERIFICATION OF SHIPS’ ENERGY CONSUMPTION DATA - GARD
From 22 December 2022, ships trading to Chinese ports must record their energy consumption data in accordance with the requirements of their Ship E ...
Thursday, 22 December 22
AN OVERVIEW OF THE LNG MARKET - VESSELSVALUE
LNG values have continued to strengthen, spurred by skyrocketing earnings that have surpassed last year’s record breaking peaks. In November, ...
Thursday, 22 December 22
COKING COAL SLUMPS AS TALKS ON AUSTRALIA-CHINA TRADE RIFT LOOM - REUTERS
Chinese coking coal futures dropped more than 3 per cent on Tuesday (Dec 20), extending losses, as supply of the steelmaking input might increase i ...
Monday, 19 December 22
ENERGY CRISIS FUELS COAL COMEBACK IN GERMANY - REUTERS
Coal has made a comeback in Germany this year, as Europe’s largest economy turns to the dirty fuel to power it through an energy crisis.
...
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- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Alfred C Toepfer International GmbH - Germany
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Minerals Council of Australia
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- MS Steel International - UAE
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Power Finance Corporation Ltd., India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Madhucon Powers Ltd - India
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- The University of Queensland
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
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