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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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Tuesday, 05 April 22
INDONESIAN COAL PRICE REFERENCE HITS RECORD ABOVE $288
COALspot.com: Indonesian Coal Price Reference for April in a steep climb from March 2022.
As expected, Russia – Ukraine war dr ...
Thursday, 31 March 22
CHINA STATE PLANNER ASKS COAL INDEX PROVIDERS TO RECTIFY IRREGULARITIES - REUTERS
China’s state planner has asked some major coal price index providers to rectify “severe irregularities” it had identified in the ...
Thursday, 31 March 22
IMPORTED COAL PRICES TO JUMP 55% IN APR-JUN, IMPACT INDIAN FIRMS: ICRA - LIVEMINT
Supply disruption owing to the Russia-Ukraine conflict could push the price of imported coal by 45-55% in Q1FY23 compared to the previous quarter, ...
Thursday, 31 March 22
CHINA'S COAL OUTPUT SET FOR MODERATE GROWTH IN 2022 - INDUSTRY BODY - REUTERS
China is expected to see its coal output to grow further in 2022 after hitting a record last year, an industry body forecast on Wednesday, as the c ...
Tuesday, 29 March 22
MEMR OF INDONESIA HAS FIXED COAL PRICE AT US$ 90 PER TONNE FOR DOMESTIC INDUSTRIES EXCEPT SMELTER INDUSTRIES; FOR PLN USD 70 IS APPLICABLE
Minister of Energy and Mineral Resources (ESDM) Arifin Tasrif has set the selling price of coal for domestic, industrial except metal processing an ...
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- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Pendopo Energi Batubara - Indonesia
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Central Electricity Authority - India
- Makarim & Taira - Indonesia
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Star Paper Mills Limited - India
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- AsiaOL BioFuels Corp., Philippines
- Electricity Authority, New Zealand
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Ceylon Electricity Board - Sri Lanka
- Borneo Indobara - Indonesia
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Australian Coal Association
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Posco Energy - South Korea
- Thai Mozambique Logistica
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Jindal Steel & Power Ltd - India
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