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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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Saturday, 20 August 22
KOSPO TO IMPORT 240000 MT OF MIN 4400 KCAL/KG NCV STEAM COAL FOR OCTOBER;LOADING FROM RUSSIAN PORTS NOT ALLOWED
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 240,000 MT of min 4,400kcal/kg to max. 4,999 kcal/kg NC ...
Wednesday, 17 August 22
INDIAN COMPANIES SWAPPING DOLLAR FOR ASIAN CURRENCIES TO BUY RUSSIAN COAL - REUTERS
Indian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoidi ...
Wednesday, 17 August 22
LNG: MAJOR INVESTMENT AND EXPANSION PHASE, DOUBLING OF LIQUEFACTION CAPACITY BY 2028 PROJECTED - CLARKSONS
Clarksons Research have released the latest version of their long standing annual review, LNG Trade & Transport, on to Shipping Intelligence Ne ...
Wednesday, 17 August 22
UNAFFORDABLE LNG PRICES UNDERMINE RAPID DEMAND GROWTH FORECASTS IN KEY ASIAN MARKETS - IEEFA
Sustained high prices may accelerate downward pressures on Asian LNG demand, clouding long-term industry outlooks
The global liquefi ...
Wednesday, 17 August 22
CHINA'S COAL-RICH SHANXI MAKES STRIDES IN HIGH-QUALITY DEVELOPMENT - XINHUA
Shanxi, a major coal-producing province in north China, has made continuous advances in high-quality development over the past decade, according to ...
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- Offshore Bulk Terminal Pte Ltd, Singapore
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Ceylon Electricity Board - Sri Lanka
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Bhatia International Limited - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Independent Power Producers Association of India
- Siam City Cement PLC, Thailand
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Parliament of New Zealand
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Cigading International Bulk Terminal - Indonesia
- McConnell Dowell - Australia
- PTC India Limited - India
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- Antam Resourcindo - Indonesia
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
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