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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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Friday, 23 September 22
EUROPEAN STEEL BUYERS SEEK DIRECTION IN VOLATILE MARKET - MEPS INTERNATIONAL
Demand for steel is slow to recover, after the summer break. Mill production costs continue to increase. Steel purchasers are uncertain about the f ...
Friday, 23 September 22
BUOYANT COAL INDUSTRY SEEKS WAYS TO STAY IN THE LONG-TERM ENERGY MIX - REUTERS
There’s no doubt that the global coal industry has been a major beneficiary of Russia’s invasion of Ukraine and the subsequent energy c ...
Friday, 23 September 22
MARKET INSIGHT - INTERMODAL
In view of the forthcoming winter, Europe is trying to escape from its energy (oil & gas) dependency from Russia to ensure energy abundance eve ...
Tuesday, 20 September 22
CHINA'S DAILY COAL OUTPUT HITS 3-MONTH LOW IN AUGUST ON RAINS, COVID CURBS - REUTERS
China’s daily coal output in August slipped to a three-month low as some mines in its biggest coal mining regions reduced operations or even ...
Tuesday, 20 September 22
CHINA COAL OUTPUT UP 8.1 PCT IN AUGUST - XINHUA
China’s raw coal output posted stable expansion in August, official data showed.
The country produced 370 million tonnes of ra ...
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Showing 226 to 230 news of total 6871 |
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- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Australian Coal Association
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Tamil Nadu electricity Board
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Borneo Indobara - Indonesia
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Heidelberg Cement - Germany
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Parliament of New Zealand
- London Commodity Brokers - England
- Carbofer General Trading SA - India
- Minerals Council of Australia
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- McConnell Dowell - Australia
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