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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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Monday, 19 November 12
GOVT PREPARES TO FACE ANOTHER SUIT ON MINING LAW - THE JAKARTA POST
The government is gearing up to face a complaint on the 2009 Mining Law prepared by the same organization that previously brought down upstream oil ...
Monday, 19 November 12
IHS MCCLOSKEY ASIA PACIFIC COAL OUTLOOK CONFERENCE 2012
With the current global oversupply of thermal coal showing no signs of abating and spot prices falling to a two-year low, concerns are growing that ...
Sunday, 18 November 12
INDONESIAN SUB BITUMINOUS COAL SWAPS FOR JANUARY 2013 DELIVERY GAINS 1.29 PERCENT WOW
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for January 2013 delivery gains 1.29 percent WoW and 0.25 percent DoD on Friday, 16 Novembe ...
Saturday, 17 November 12
THE SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA ARE EXPECTED TO BE UP NEXT WEEK - VISTAAR
COALspot.com - This week market sentiments ended positive with all the segments ending higher except for handy size which was almost at same levels ...
Saturday, 17 November 12
RECORD DEMOLITION ACTIVITY SEEKS TO CURB TONNAGE OVERSUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
This year will prove to be another record-breaker in terms of scrapping of older vessels across all shipping segments, as the equally feverish pace ...
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- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Planning Commission, India
- ICICI Bank Limited - India
- The University of Queensland
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Tamil Nadu electricity Board
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Standard Chartered Bank - UAE
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Indika Energy - Indonesia
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Manunggal Multi Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Australian Commodity Traders Exchange
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Australian Coal Association
- GMR Energy Limited - India
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Anglo American - United Kingdom
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
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