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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, 09 November 12
SHIP OWNERS TURN TO SECOND HAND VESSELS, WHICH COME AT ATTRACTIVE PRICES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The attractiveness of modern second hand vessels, which are often priced aggressively can't be ignored by cash-rich ship owners, who are taking adv ...
Thursday, 08 November 12
LARGE ECO SUPRA : INDO - INDIA NOW FIXED AT USD 11K FOR DELIVERY SINGAPORE - FEARNLEYS
Handy
The Atlantic market continues to remain weak with rates further softening on FH. Rates from USG to Feast were around USD 14k and Black Sea to ...
Thursday, 08 November 12
DRY BULK MARKET RETREATS AGAIN ON HIGHER SHIP SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In further evidence of a latest round of dry bulk shipping misery, the industry's benchmark fell for the 11th straight session yesterday, as the in ...
Thursday, 08 November 12
JOIN CHINA STEAM COAL SUPPLY - DEMAND FORUM
Join China Steam Coal Supply-Demand Forum & Visit Shenhua Yudean Zhuhai Port Coal Terminal
Press Release - Organized by CBI BIZ and suppo ...
Wednesday, 07 November 12
NEWBUILDING ORDERING ACTIVITY ON A STEADY PACE PRIOR TO THE END OF THE YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding orders, which to many involved in the shipping industry, are the main reason of today's low freight rates and subsequent financial prob ...
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- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- PTC India Limited - India
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- Renaissance Capital - South Africa
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- The University of Queensland
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Parliament of New Zealand
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Australian Coal Association
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Chamber of Mines of South Africa
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Central Electricity Authority - India
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Business Power Corporation, Philippines
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Toyota Tsusho Corporation, Japan
- Barasentosa Lestari - Indonesia
- Meralco Power Generation, Philippines
- VISA Power Limited - India
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Sical Logistics Limited - India
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