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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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Wednesday, 05 October 22
BUNKER PRICES DOWN AGAIN; IS THERE MORE TO COME? - INTEGR8 FUELS
It’s the economy…..”
VLSFO prices are now back to levels at the start of this year. After all the extremes of thi ...
Wednesday, 05 October 22
MARKET INSIGHT - INTERMODAL
Amid the looming western sanctions on Russia, the country is challenged to pivot its energy markets away from Europe and toward the East. Yet, Russ ...
Tuesday, 04 October 22
A REMARKABLE SHIFT IN FORTUNES HAS BEEN NOTED IN THE CRUDE OIL TANKER MARKETS - ALLIED SHIPPING
A remarkable shift in fortunes has been noted in the crude oil tanker markets over the past month, yet despite these shifts being seemingly in thei ...
Tuesday, 04 October 22
OIL PRICES COULD SOON RETURN TO $100 AS OPEC+ CONSIDERS ‘HISTORIC’ CUT, ANALYSTS SAY - CNBC
An influential alliance of some of the world’s most powerful oil producers is reportedly considering their largest output cut since the start ...
Tuesday, 04 October 22
INDONESIAN COAL PRICE REFERENCE SURGE AGAIN TO RECORD HIGH
COALspot.com: Indonesian Coal Price Reference reached another record high in October as Russia's war in Ukraine continues to spark a surge in c ...
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- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Kapuas Tunggal Persada - Indonesia
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Madhucon Powers Ltd - India
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Aditya Birla Group - India
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- SMC Global Power, Philippines
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Bangladesh Power Developement Board
- Dalmia Cement Bharat India
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- VISA Power Limited - India
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- Global Green Power PLC Corporation, Philippines
- Independent Power Producers Association of India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Vedanta Resources Plc - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Indika Energy - Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- MS Steel International - UAE
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Coastal Gujarat Power Limited - India
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
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