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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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Tuesday, 04 December 12
JATENERGY SIGNS MOU FOR INDONESIAN COAL ASSET
COALspot.com - Jatenergy Limited has announced that its fully-owned Indonesian subsidiary, PT Barata Energy (BE), has signed an exclusive, non-bindi ...
Tuesday, 04 December 12
NEWCASTLE PORT SHIPPED 55.88 PERCENT MORE COAL W/E 3 DECEMBER 2012
COALspot.com - Newcastle port in Australia has loaded 2,796,341 MT of thermal and coking coal for week ended 0700 hours 3 December 2012, Newca ...
Sunday, 02 December 12
YEAR 2013, YEAR OF SUPPLY OR DEMAND?
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q1 2013 delivery gained 2.87 & 0.83 percent MoM and WoW respectively ...
Saturday, 01 December 12
TIGHT SUPPLY, DEMAND PUSH INDO-INDIA SUPRAMAX FREIGHT RATES HIGHER - VISTAAR
COALspot.com - The freight market was mixed this week as cape and Panamax indices are closing softer.
The BDI was down 0.37 pct closing at 1,086 ...
Friday, 30 November 12
FUTURE TREND OF SECOND HAND SHIP VALUES PUZZLING SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
One of the major challenges that ship owners are facing today is whether or not to invest in a second hand vessel at any given time. For instance, i ...
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- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Salva Resources Pvt Ltd - India
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- SMC Global Power, Philippines
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- The University of Queensland
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Deloitte Consulting - India
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Global Coal Blending Company Limited - Australia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Metalloyd Limited - United Kingdom
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Planning Commission, India
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Aditya Birla Group - India
- Directorate General of MIneral and Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
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