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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, 12 November 12
THE ESTABLISHMENT OF NORTH KALIMANTAN AS A NEW PROVINCE WILL NOT AFFECT THE LOCAL MINING COMPANIES
The government of Indonesia has ensured that the establishment of North Kalimantan as a new province will not affect the local mining companies ...
Monday, 12 November 12
DRILLING COMPLETED AT THE MOORLANDS DEPOSIT, WEST BOWEN PROJECT
Press Release - Cuesta Coal Limited (ASX: CQC) (“Cuesta”) is pleased to announce it has completed its exploration activities at the Moor ...
Monday, 12 November 12
BARGE-LOAD OF 5K TONNES OF COAL FROM THE ADK JOINT VENTURE SHIPPED LAST WEEK
COALspot.com - Orpheus Energy (ASX:OEG) has announced that, it has successfully shipped a 5,000 tonne of ADK thermal coal to an Indonesian trading g ...
Sunday, 11 November 12
AN OPTIMISTIC WEEK FOR INDONESIAN SUB-BIT COAL
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for January 2013 delivery gains 2.08 percent WoW and 1.28 percent DoD on Friday, 9 November ...
Sunday, 11 November 12
THE IRON ORE AND COAL PRICES MOVEMENTS REMAINS LOW - VISTAAR
COALspot.com The market remained soft with all the sectors soft.
The BDI and was down by 4.67 pct closing at 940 points, on Friday 9 Novemb ...
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- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maheswari Brothers Coal Limited - India
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Ministry of Transport, Egypt
- Indian Oil Corporation Limited
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Thai Mozambique Logistica
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- London Commodity Brokers - England
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Romanian Commodities Exchange
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Directorate General of MIneral and Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Planning Commission, India
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- VISA Power Limited - India
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- White Energy Company Limited
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Australian Coal Association
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