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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, 22 November 12
HANDY: INDO-INDIA, LARGE ECO SUPRA NOW FIXED AT USD 12500 - FEARNRESEARCH
Handy
The north Continent is seeing plenty of tonnages but lack of cargoes. TA business are around 11k and fronthaul is around 17k.Tonnages has tig ...
Thursday, 22 November 12
DRY BULK MARKET RISE, BUT OUTLOOK SEEN DIM ON THE BACK OF RECORD NEW BUILDING DELIVERIES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been under hefty pressure since the start of the year, as a result of record newbuilding deliveries and below-par demand for ...
Wednesday, 21 November 12
LITTLE IMPACT FROM DISSOLUTION OF BP MIGAS ON INDONESIAN OIL & GAS COMPANIES - FITCH
Fitch Ratings has said that the recent court order to abolish the Indonesian upstream oil and gas regulator, BP Migas, has minimal immediate impact ...
Wednesday, 21 November 12
ORPHEUS ENERGY SECURES FIRST COAL OFF TAKE CONTRACT
COALspot.com - Orpheus Energy Limited (ASX:OEG) has announced that it has signed a coal sales contract with an Indonesian steel manufacturing compan ...
Tuesday, 20 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 13.18 PERCENT LESS COAL W-W
COALspot.com - Newcastle port in Australia has loaded 2,691,731 MT of thermal and coking coal for week ended 0700 hours 19 November 2012, Newc ...
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- Chamber of Mines of South Africa
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Rio Tinto Coal - Australia
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Posco Energy - South Korea
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Cement Manufacturers Association - India
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- ASAPP Information Group - India
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Aditya Birla Group - India
- India Bulls Power Limited - India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pendopo Energi Batubara - Indonesia
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- GMR Energy Limited - India
- Minerals Council of Australia
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