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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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- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Dalmia Cement Bharat India
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Petron Corporation, Philippines
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- CNBM International Corporation - China
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Ministry of Mines - Canada
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Meralco Power Generation, Philippines
- SN Aboitiz Power Inc, Philippines
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- AsiaOL BioFuels Corp., Philippines
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Thai Mozambique Logistica
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
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