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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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Tuesday, 06 November 12
NOVEMBER 2012 HBA $35.21 LOWER THAN A YEAR AGO
COALspot.com - The Indonesian government’s declared coal reference price for November’ 12 has lost US$ 4.60 per MT M-o-M.
...
Sunday, 04 November 12
SUB-BIT INDONESIA COAL SWAPS FOR DECEMBER' 12 DELIVERY FALLS TO $ 59.78
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery fell -1.02 percent on WoW but gained 0.08 percent on D-D on Friday, 2 ...
Saturday, 03 November 12
THE SUPRAMAX FREIGHT EXPECTED TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - This week the market remained soft with all the sectors soft.
The BDI and was down by 6 pct closing at 986 points. The cape index ...
Saturday, 03 November 12
DEMOLITION IS THE KEY FOR DRY BULK SHIPPING'S RECOVERY SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With the number of new building deliveries so far in 2012 already having surpassed the total of 2011, it's more than clear that the dry bulk sector ...
Thursday, 01 November 12
INDONESIA HAS REVISED DOWN ITS 2012 DOMESTIC MARKET OBLIGATION REQUIREMENT FOR COAL
COALspot.com - Minister of Energy and Mineral Resources of Indonesia has revised down its 2012 domestic market obligation requirement due to lower d ...
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- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Iligan Light & Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- PTC India Limited - India
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Mintek Dendrill Indonesia
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Merrill Lynch Commodities Europe
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Banpu Public Company Limited - Thailand
- Jindal Steel & Power Ltd - India
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Singapore Mercantile Exchange
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Ministry of Finance - Indonesia
- Marubeni Corporation - India
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- Sojitz Corporation - Japan
- Australian Coal Association
- India Bulls Power Limited - India
- South Luzon Thermal Energy Corporation
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
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