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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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Friday, 30 November 12
IS INDONESIAN COAL INDUSTRY DEPENDS HEAVILY ON INDIA AND CHINA?
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 35,143,587* tons of coal in October 2012. October exports are 19 ...
Thursday, 29 November 12
BUMI TO PRODUCE 100 MILLION TONS OF COAL BY 2014
COALspot.com - Expansions on both BUMI’ s subsidiaries, PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia ( Arutmin) , are ...
Thursday, 29 November 12
PANAMAX : A FAIRLY STEADY MARKET WITH USD 8.5-9K/DAY FOR 2 LADEN LEGS IN ATLANTIC - FEARNLEYS
Handy
The Atlantic market continues to remain quiet due to more supply of ships. Rates from USG to Far East were around USD 18k and Black Sea to Fa ...
Thursday, 29 November 12
DRY BULK MARKET SLIGHTLY HIGHER DESPITE LULL ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market was marginally higher yesterday, according to the industry's benchmark, the Baltic Dry Index (BDI), which rose by 7 points to 1 ...
Wednesday, 28 November 12
NEWBUILDING ORDERING PICKS UP AS SHIP OWNERS LOOK TO CLOSE DEALS BEFORE THE END OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners are active once again in the newbuilding ordering market, as they look to clinch deals ahead of the end of the year. Once again their fo ...
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- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- The State Trading Corporation of India Ltd
- GMR Energy Limited - India
- CNBM International Corporation - China
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Aditya Birla Group - India
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Electricity Generating Authority of Thailand
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Minerals Council of Australia
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Indonesian Coal Mining Association
- The University of Queensland
- VISA Power Limited - India
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Bhushan Steel Limited - India
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- Global Business Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
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