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Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
 Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, although there is a risk low prices may persist into 2013, changing the industry's supply side dynamics.
The price of thermal coal (5,500 kcal coal at Newcastle Australia on a free-on-board basis) reached a two-year low of USD87 per metric ton in early June 2012, down from USD142/mt in January 2011. Major reasons for this decline include China's economic slowdown and high coal inventory levels, increased production and exports from Indonesia and Australia, and increased exports by US coal producers due to cheap natural gas displacing coal used in US power generation.
Fitch believes that prices can recover from current lows once demand from key importers - China and India - improves, and the supply side adjusts to reflect the price environment. India depends on coal as its major energy source and is increasingly relying on imported coal as it struggles to increase domestic production. Likewise in China, thermal coal fired power represents more than 70% of the country's energy needs; Fitch believes thermal coal demand from China will lift again post sufficient policy easing by the government, and continue rising over the medium-to-long term in line with the country's strong GDP growth outlook, albeit lower than previous years.
The weak pricing environment is exposing the business risks of high-cost coal producers, as coal prices fall near or below the marginal cost of production. Many Australian producers have high cash costs of production; such operators will be significantly affected if prices remain low for an extended period. At the same time, sustained low coal prices can shift buyers from low-rank coal to higher-grade coals and thus negatively affect both demand and realized prices for low-rank coal.
Fitch notes that many large coal producers have contracts in place with both volumes and prices fixed, typically for a period of one year; such contracts can account for a meaningful share of their total revenues - for example around 65% for Adaro Indonesia ('BB+'/Stable) and around 45% PT Indika Energy ('B+'/Positive). These operators would be insulated from a temporary weakening of coal prices to some extent. However, should low prices persist through 2012 and into 2013, it will negatively affect the prices they negotiate for 2013; such negotiations typically take place in Q4 and Q1 of each calendar year.
Should the current low price environment persist into 2013, Fitch expects high-cost producers in Australia and the US to undertake production cuts, and review expansion projects under consideration. Fitch also believes that production expansion plans by low-cost producing countries like Indonesia may be curtailed. Such actions would limit coal production levels (or growth) and help address oversupply.
In rating companies producing commodities, like coal, Fitch takes a through-the-cycle approach to its ratings; this factors in a reasonable level of rating headroom to accommodate weakening of coal prices. Cash cost of production and cash margins over an industry cycle are given a heavy emphasis and factored into the ratings. Hence, Fitch does not expect any immediate negative rating actions on its rated coal producers in the Asia-Pacific region.
Source: Fitch Ratings
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Saturday, 22 December 12
FALL IN CAPE AND PANAMAX RATES DRAG BDI INDEX - VISTAAR
COALspot.com - The freight market further softened this week closing at 700 points (down by 10.71 pct). The cape index continued to fall and w ...
Saturday, 22 December 12
DELTA DUNIA MAKMUR PRODUCED 3.2 MILLION TONS OF COAL IN NOVEMBER' 12
COALspot.com - PT Delta Dunia Makmur Tbk., has removed 28.1 million bcm* (+1.8% YoY) of Overburden in November 2012 while coal production was at 3.2 ...
Friday, 21 December 12
JORC CODE, 2012 EDITION NOW FINALIZED
COALspot.com - The JORC Committee has announced that, the completion of the review of the JORC Code of 2012 Edition.
The JORC Code, 2012 Ed ...
Thursday, 20 December 12
COAL CLOSING IN ON OIL AS WORLD'S TOP ENERGY SOURCE BY 2017
COALspot.com - Coal’s share of the global energy mix continues to rise, and by 2017 coal will come close to surpassing oil as the world’ ...
Thursday, 20 December 12
CHINA'S IRON ORE AND COAL DEMAND WILL SHAPE THE CAPESIZE DRY BULK TRADE DURING 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the best efforts from ship owners to help alleviate the current tonnage oversupply issue in the dry bulk segment, especially in the larger v ...
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- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- IHS Mccloskey Coal Group - USA
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Australian Coal Association
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Ambuja Cements Ltd - India
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- PTC India Limited - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Planning Commission, India
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Mercator Lines Limited - India
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