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Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
 Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem facing thermal electricity generators - that the tariff framework is not sustainable in the long term.
The problem centres on China's thermal or coal-fired plants, which in 2011 represented 72.5% of total electricity production of 4,692.8TWh, and are likely to remain the backbone of electricity generation for the foreseeable future. The problem is not with China's national electricity grid, which is well developed, but rather with the non-viability of the pricing mechanism for the coal-fired generators.
The Chinese thermal generators are unwilling to produce excess electricity in peak periods when their marginal generation costs are above the tariffs the government will allow them to charge the grid companies. Tariff adjustments have not been timely or sufficient despite the rising cost of coal, as the government has prioritised the management of inflation - thereby constraining profitability. The weak economics have also discouraged private-sector investment, while the state-linked thermal generators - Huaneng International ('BB+'/Stable), Datang International ('BB'/Stable), China Power International Development ('BB'/Stable), and Huadian International ('BB-'/Stable) - are now struggling with substantially weakened balance sheets.
Coal input prices for the thermal generators have increased dramatically over the past three years to end-2011, rising by an average of 16% pa. Meanwhile, the Chinese government has only allowed nationwide electricity tariffs to rise once in the last two years, by around 5% for non-residential customers in December 2011. Some tariff increases also occurred in selective provinces in April 2011, but the impact on generators' profitability was limited.
A 5% cap on annual coal price increases was introduced along with the December 2011 electricity tariff revision, but this applied only to contracted coal prices. These capped prices only represent around 30%-40% of the total needs of most thermal generators. Accordingly, large amounts of coal have to be bought on the spot market at substantially higher prices, making excess electricity production an uneconomic proposition. The substantial premium - typically 30% - on spot market prices against the capped contract coal price results in coal producers seeking ways to reduce their contracted sales in favour of spot sales, which is steadily eroding any benefit from the coal price caps.
A longer-term problem, and a potential cause of an eventual structural shortfall in generation capacity, is that limited profit - or losses - from thermal operations have since 2008 led to new capex in the industry being diverted away from thermal and into wind, hydro and vertical integration via coal mine acquisitions. A National Energy Administration (NEA) report dated 30 January 30 2012 confirmed that China's investment in thermal power assets fell again in 2011, by 26%, to CNY105.4bn. This trend, which cannot be reversed quickly due to the typical minimum two-year lead time to build new thermal capacity, is a serious concern given China's continued dependence on coal for its power generation.
The Chinese thermal generators are likely to face sustained weak operating cash flows and negative free cash generation under this heavily regulated environment, a situation which Fitch believes to be unsustainable in light of the continued growth in the Chinese economy. The agency believes that China is looking to introduce price reforms across the energy industries, but achieving a truly cost-reflective tariff regime is likely to take several more years, and will require a favourable inflationary climate. In the meantime, demand will continue to outstrip supply, even if - theoretically - the capacity exists within the generation system.
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Wednesday, 06 June 12
INDONESIAN GOVERNMENT'S DECLARED COAL PRICES CONTINUING ITS DECLINE
COALspot.com - Indonesian HBA fell to lowest level since January 2011 in June 2012. The monthly coal reference price for coal sales this month ...
Monday, 04 June 12
MITRABAHTERA SUBSIDIARY SECURES CONTRACT FROM BERAU COAL - INSIDER STORIES
Insider Stories reported that, PT Mitra Alam Segara Sejati, a subsidiary that is 60% owned by PT Mitrabahtera Segara Sejati Tbk (MBSS), has secur ...
Sunday, 03 June 12
TTI ESTABLISHES COAL TRADING & MARKETING OFFICE
COALspot.com - TTI has officially established its coal trading, marketing-office in Jakarta, Indonesia. PT. Gunung Tinggi Coal is the TTI’s fi ...
Sunday, 03 June 12
FREIGHT MARKET CONTINUING ITS DECLINE
COALspot.com - The BDI continued to fall for the fifth straight week and the BDI fell by 2.57 pct this week closing at 904 points.
The Cape Size ...
Friday, 01 June 12
TNPL HAS SECURED 300K MT OF 6000 GAD COAL AT US$ 81 CNF TUTICORIN
COALspot.com - An India based coal trader Adani has offered the lowest price of US$ 81.00 per metric ton for calorific value of 6000 GAD and 15 perc ...
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Showing 4706 to 4710 news of total 6871 |
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- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Coal and Oil Company - UAE
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Mercator Lines Limited - India
- The University of Queensland
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- PNOC Exploration Corporation - Philippines
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Planning Commission, India
- GMR Energy Limited - India
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Vedanta Resources Plc - India
- White Energy Company Limited
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Neyveli Lignite Corporation Ltd, - India
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Parry Sugars Refinery, India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Sinarmas Energy and Mining - Indonesia
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