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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, 03 November 22
HANDYSIZE VALUES MOVING UP IN OCTOBER, WHILE LNG VALUES SKYROCKET - VESSELSVALUE
Handysize values have increased this month across most ages, following a period of decline. Values for generic 10 year old Handysizes have moved up ...
Thursday, 03 November 22
EUROPEAN GAS SUPPLY SURPLUS, NOVEMBER HBA DOWN TO US$ 308.2 PER TON - ESDM
European gas supply conditions have a major influence in determining fluctuations in the Reference Coal Price (HBA). The November 2022 HBA recorded ...
Wednesday, 02 November 22
MARKET INSIGHT - INTERMODAL
Only five weeks before western sanctions’ full effect, uncertainty over energy has markets and governments on the edge. What was initially th ...
Tuesday, 01 November 22
CHINA COAL TRADE DISRUPTED BY COVID OUTBREAKS AS WINTER LOOMS - REUTERS
China’s strict COVID-19 policy is constraining coal supplies and pushing up prices, industry officials and traders say, just weeks before the ...
Monday, 31 October 22
U.S. COAL-FIRED GENERATION DECLINING AFTER BRIEF RISE LAST YEAR - EIA
We expect 6% less U.S. coal-fired generation in 2022 than in 2021, according to our latest Short-Term Energy Outlook (STEO). Although coal-fired ge ...
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- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Maheswari Brothers Coal Limited - India
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Cement Manufacturers Association - India
- Interocean Group of Companies - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Gujarat Mineral Development Corp Ltd - India
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- OPG Power Generation Pvt Ltd - India
- Eastern Energy - Thailand
- VISA Power Limited - India
- ASAPP Information Group - India
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
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