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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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Thursday, 01 November 12
SOUTH KOREAN POWER UTILITY EWP TO PURCHASE 670,000 MT OF COAL FOR JAN - FEB 2013 DELIVERY
COALspot.com: Korea East-West Power Co. Ltd. on behalf of Korea South-East Power Co. Ltd., Korea Southern Power Co. Ltd., Korea Midland Power Co. Lt ...
Thursday, 01 November 12
KOMIPO LOOKING FOR 440,000 MT OF 4600 KCAL/KG NAR COAL FOR BORYEONG POWER PLANT
COALspot.com - Korea Midland Power Co. Ltd.(KOMIPO) is inviting bids from coal producers, marketing companies or traders to supply of 440,000 Metric ...
Thursday, 01 November 12
CAPESIZE RATES FALL, DRY BULK MARKET RETREATS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It was another lackluster session yesterday in the dry bulk markets, with the industry's benchmark, the BDI (Baltic Dry Index) retreating by 1.63 p ...
Thursday, 01 November 12
HANDY : WCI-CHINA RATES ARE AT AROUND USD 5,000 AND ECI-CHINA AROUND USD 4000 - FEARNLEYS AS
Handy
The Atlantic market remains quiet due to a lack of cargoes and an increased supply of ships. Rates from the Continent to east Med were around ...
Tuesday, 30 October 12
COAL PRODUCTION TO RISE BY FIVE PERCENT IN 2013 - TEMPO INTERACTIVE
TEMPO Interactive reported that, Indonesian Coal Mining Association (APBI) chairman Bob Kamandanu has estimated that Indonesian coal production will ...
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- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- Gujarat Sidhee Cement - India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- White Energy Company Limited
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- VISA Power Limited - India
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Antam Resourcindo - Indonesia
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- TeaM Sual Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- The University of Queensland
- McConnell Dowell - Australia
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Parliament of New Zealand
- Alfred C Toepfer International GmbH - Germany
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Altura Mining Limited, Indonesia
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
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