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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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Thursday, 13 December 12
HANDY : WCI-CHINA RATES AROUND $ 6000 AND ECI-CHINA AROUND $ 4000 - FEARNLEYS
Handy
Atlantic market remained unchanged. Rates from USG to Feast were around USD 18k and Black Sea to Feast about USD 10k. USG-Skaw-Passero rates ...
Wednesday, 12 December 12
69.23 PERCENT OF END-USERS ARE BELIEVE, COAL PRICES ARE IN UPWARD TREND
COALspot.com - The Indonesian government’s declared coal reference price for December’ 12 has gained US cents 31 per MT M-o- ...
Wednesday, 12 December 12
CAPESIZE FREIGHT RATES TO RANGE BETWEEN $9,000 - 16,000/DAY IN THE COMING WEEKS SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In its regular update on the dry bulk market, BIMCO forecasted yesterday, that Capesize time-charter rates are expected to stay elevated in the foll ...
Tuesday, 11 December 12
NEWCASTLE PORT IN AUSTRALIA HAS LOADED 2,720,205 MT OF COAL W/E 10 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 2,720,205 MT of thermal and coking coal for week ended 0700 hours 10 December 2012, Newc ...
Sunday, 09 December 12
COAL SWAPS HAVE LOST DIRECTION DUE TO LACK OF ASIAN INTEREST
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1’ 2013 delivery gained 2.43 percent M-M but lost WoW by 0.54 percent and 0.62 ...
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- Jorong Barutama Greston.PT - Indonesia
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Bulk Trading Sa - Switzerland
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Gujarat Sidhee Cement - India
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
- Riau Bara Harum - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Sakthi Sugars Limited - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Baramulti Group, Indonesia
- Ministry of Transport, Egypt
- MS Steel International - UAE
- ASAPP Information Group - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Kumho Petrochemical, South Korea
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- Planning Commission, India
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Xindia Steels Limited - India
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Australian Coal Association
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Kideco Jaya Agung - Indonesia
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Semirara Mining Corp, Philippines
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- PTC India Limited - India
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
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