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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, 16 November 12
SHIP OWNERS KEEP ON INVESTING IN SECOND HAND VESSELS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Priced attractively, modern and with prompt delivery dates, second hand vessels are proving to be rather popular among cash-rich ship owners these d ...
Friday, 16 November 12
HANDY : IRON ORE WAS QUIET AND RATES FROM INDIA TO CHINA AROUND USD 5500
Handy
The Atlantic was weak with more supply of ships. Rates from Continent/ Feast at USD 9000 and from USG/China at USD 15k. The Pacific market re ...
Wednesday, 14 November 12
AUSTRALIAN NEWCASTLE PORT HAS LOADED 11.14 PERCENT MORE COAL W-W
COALspot.com - Newcastle port in Australia has loaded 3,100,686 MT of thermal and coking coal for week ended – 0700 hours 12 November 2012, Ne ...
Tuesday, 13 November 12
INITIAL COAL PRODUCTION AT KATINGAN RIA ON TRACK FOR 2013 FOLLOWING GRANTING OF 'IN PRINCIPLE' FORESTRY PERMIT, INDONESIA
Realm Resources Ltd (“Realm” or the “Company” - ASX: RRP) has announced that its application to upgrade its exploration fore ...
Tuesday, 13 November 12
BULK PORTS & TECHNOLOGY ASIA 2013
Press Release - TOC Events are pleased to announce a new addition to our global portfolio with the launch of the inaugural Bulk Ports & Technolo ...
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- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Xindia Steels Limited - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Orica Mining Services - Indonesia
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Medco Energi Mining Internasional
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Grasim Industreis Ltd - India
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- European Bulk Services B.V. - Netherlands
- Holcim Trading Pte Ltd - Singapore
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Dalmia Cement Bharat India
- Australian Coal Association
- VISA Power Limited - India
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Posco Energy - South Korea
- Coalindo Energy - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Jindal Steel & Power Ltd - India
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
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