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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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Monday, 31 October 22
CHINA COAL OUTPUT UP 12.3 PCT IN SEPTEMBER - XINHUA
China’s raw coal output posted stable expansion in September, official data showed.
The country produced 390 million tonnes of ...
Wednesday, 26 October 22
BIMCO PUBLISHES UPDATED GENCON CONTRACT
BIMCO has published a revised and updated version GENCON 2022 – one of its flagship contracts within its portfolio of standard contracts for ...
Monday, 24 October 22
KOSPO TO INVITE 400,000 MT OF COAL FOR 3 YEARS
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an international tender for 400,000 MT of 3,800 - 4,400kcal/kg NCV and Sulfur Max 0 ...
Wednesday, 19 October 22
ASIA COULD BE A BRIGHT SPOT AMID GLOBAL DOWNTURN NEXT YEAR, ECONOMISTS SAY - CNBC
Asia — especially Southeast Asia — remains a bright spot, even as the global economy looks set to head into recession next year, econom ...
Wednesday, 19 October 22
WHAT WILL THE GAS MARKET LOOK LIKE IN A NET ZERO WORLD? - WOOD MACKENZIE
The global gas and LNG market faces a number of ‘great unknowns’. With the market in turmoil uncertainty abounds – from the scale ...
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- Trasteel International SA, Italy
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- VISA Power Limited - India
- Mjunction Services Limited - India
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Miang Besar Coal Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- Kepco SPC Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Deloitte Consulting - India
- Planning Commission, India
- SMG Consultants - Indonesia
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