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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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Friday, 01 June 12
COKAL ACCEPTED ON THE CLEAN AND CLEAR LIST FOR ITS BORNEO BARA PRIMA AND BUMI BARITO MINERAL PROJECTS
- Borneo Bara Prima (BBP) Project confirmed on the Clean and Clear List 9th May 2012
- Bumi Barito Mineral (BBM) Project confirmed on the Clean and ...
Friday, 01 June 12
ADARO BUYS MAJORITY STAKE IN AFFILIATED BHAKTI ENERGI - INSIDER STORIES
Insider Stories reported that, PT Adaro Energy Tbk entered into an option to provide a convertible loan of up to US$500 million for a period of 3 ye ...
Thursday, 31 May 12
DRY BULK MARKET UNABLE TO FIND NEW SUPPORT TO REACH HIGHER LEVELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been unable to find new support and recover to higher levels during these past few days. As a result, the Baltic Dry Index ( ...
Wednesday, 30 May 12
ORPHEUS RAISES $2.24M TO ADVANCE INDONESIAN COAL PRODUCTION ASSETS
• $2.24 million raised from a placement to new and existing institutional and sophisticated investors from Australia and overseas
• Funds ...
Wednesday, 30 May 12
ARPENI SECURES TRANSSHIPMENT CONTRACT FROM BARUNA DIRGA
Insider Stories reported that, shipping operator PT Arpeni Pratama Ocean Line Tbk (APOL) has secured a 1-year coal transhipment contract of 4 millio ...
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Showing 4711 to 4715 news of total 6871 |
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- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- Indian Oil Corporation Limited
- Bharathi Cement Corporation - India
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Australian Coal Association
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- London Commodity Brokers - England
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- MS Steel International - UAE
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Vedanta Resources Plc - India
- Bhatia International Limited - India
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Indo Tambangraya Megah - Indonesia
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- PowerSource Philippines DevCo
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- International Coal Ventures Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Sojitz Corporation - Japan
- Bhushan Steel Limited - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Eastern Energy - Thailand
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
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