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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, 16 September 22
DRY BULK MARKET: EU’S BAN ON RUSSIAN COAL LIFTS DEMAND DESPITE ECONOMIC HEADWINDS - BIMCO
Highlights
– The Baltic Exchange Dry Index (BDI) peaked in late May and has since fallen sharply as lower Chinese demand and adverse glob ...
Friday, 16 September 22
BIMCO EMBARKS ON NEW STANDARD FOR “QUIET ENJOYMENT”
KNOWLEDGE TO ELEVATE
A newly set-up BIMCO drafting team involving a cross-section of shipowners, charterers, financing and leasing i ...
Friday, 16 September 22
INDIAN COAL PRODUCTION TO RISE 150 PER CENT IN 10 YEARS: CENTRE - EXPRESS NEWS SERVICE
The Union Ministry of Mines is expecting 150 per cent growth in coal production 10 years down the line as a result of coal reforms that had been us ...
Thursday, 15 September 22
MARKET INSIGHT - INTERMODAL
While the Organization of Petroleum Exporting Countries and its allies agreed on a 100,000 b/d output cut last week, oil flows are in the spotlight ...
Monday, 12 September 22
COAL PRICE HIKE REMAINS DIFFICULT FOR CIL: CHAIRMAN TELLS ANALYSTS - PTI
Coal India on Thursday informed investors that increasing coal prices remains difficult in the current context when the economy is grappling with h ...
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- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- White Energy Company Limited
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- The University of Queensland
- Oldendorff Carriers - Singapore
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- Indo Tambangraya Megah - Indonesia
- Planning Commission, India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Rio Tinto Coal - Australia
- Iligan Light & Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Posco Energy - South Korea
- Australian Coal Association
- Thiess Contractors Indonesia
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
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