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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, 08 July 22
AUSTRALIAN COAL PRICE BREAKS AGAIN LEVEL US$ 400/TON!, UP AROUND 4% - CNBC INDONESIA
Coal prices shot up again and crossed the level of US$ 400 per ton. On Thursday (7/7/2022) trading, the selling price of August contract closed at ...
Friday, 08 July 22
INDONESIA MULLS MORE FREQUENT SETTING OF CRUDE PALM OIL REFERENCE PRICE - REUTERS
Indonesia is considering setting its crude palm oil (CPO) export reference price every two weeks instead of monthly, a senior trade ministry offici ...
Friday, 08 July 22
BUNKER PRICES EXPECTED TO RECOVER LOST GROUND NEXT WEEK - SERGEY IVANOV, MABUX
Over the Week 27, the world bunker indices showed a sharp decline, primarily due to the fall in oil prices on July 05. The 380 HSFO index fell by 5 ...
Thursday, 07 July 22
NTPC MINES 61% MORE COAL AT 4.22 MN METRIC TONNES IN APRIL-JUNE: PTI
State-owned power giant NTPC on Tuesday said that its coal output grew by 61 per cent to Rs 42.40 lakh metric tonnes in April-June quarter from 26. ...
Thursday, 07 July 22
COAL INDIA'S PRODUCTION SETS RECORD INCREASE OF 29% YOY AT 36 MT IN Q1FY23 - IIFL SECURITIES
Coal India Limited (CIL) has ended April-June quarter FY’23 capping a historic high of 29% yoy output growth, compared to same quarter FY&rsq ...
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- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Toyota Tsusho Corporation, Japan
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Marubeni Corporation - India
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Barasentosa Lestari - Indonesia
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
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