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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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Monday, 28 May 12
COAL EXPORTS ARE JUMPING HIGHER, BUT PRICES ARE FALLING LOWER
COALspot.com: Indonesia, the world largest coal exporter, shipped 31.86* million tons of coal in April 2012, compared to 30.64* million tons i ...
Sunday, 27 May 12
THE FREIGHT MARKET FROM INDONESIA TO INDIA WAS WEAK - VISTAAR
COALspot.com - The BDI continued to fall for the fourth straight week and the BDI fell by 9.38 pct this week closing at 1,034 points.
The Cape Si ...
Sunday, 27 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS HEADING TO SOUTH DIRECTION
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries have dropped this week by 5.43 percent an ...
Saturday, 26 May 12
DRY BULK SHIP OWNERS LOOKING TO CUT BACK ON TONNAGE SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of dry bulk carriers has been the most prominent problem in the market today, pushing down rates and ‘strangling’ profita ...
Thursday, 24 May 12
DRY BULK MARKET RETREATS ON LACK OF CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market retreated yesterday on the back of lower Chinese demand for commodities such as coal and iron ore, typically hauled by dry bulk ...
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Showing 4716 to 4720 news of total 6871 |
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- Riau Bara Harum - Indonesia
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Central Electricity Authority - India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Standard Chartered Bank - UAE
- Attock Cement Pakistan Limited
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Power Finance Corporation Ltd., India
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Indika Energy - Indonesia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Bayan Resources Tbk. - Indonesia
- Kapuas Tunggal Persada - Indonesia
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Bukit Makmur.PT - Indonesia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Medco Energi Mining Internasional
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Planning Commission, India
- Mintek Dendrill Indonesia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Edison Trading Spa - Italy
- Australian Coal Association
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Indo Tambangraya Megah - Indonesia
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
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