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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, 30 October 12
NEW BUILDING ORDERING ACTIVITY KEEPS ON RETREATING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have refrained from placing any new orders of vessels during the course of the past few days, according to shipbroker reports. According ...
Monday, 29 October 12
US COAL EXPORTS ARE EXPECTED TO REACH 125 MILLION TONS THIS YEAR - EIA
COALspot.com - US coal exports are expected to reach 125 million tons this year, surpassing the old record of about 113 million tons set in 1981, sa ...
Sunday, 28 October 12
SUB-BIT INDONESIA COAL SWAPS (FOB ) FOR DECEMBER 2012 DELIVERY STAYED FLAT D-D
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery flat on D-D but gained 0.38 percent on W-W on Friday, 26 October 2012, ...
Sunday, 28 October 12
INDONESIA TO INDIA SUPRAMAX FREIGHT MARKET FAIRLY STEADY - VISTAAR
COALspot.com - The Cape size sector continued to remain active with iron ore movement being steady. All other sectors were down.
The BDI was up b ...
Friday, 26 October 12
SHIPPING MARKETS HEADING FOR DIVISION AND MULTI-TIER WILL BECOME THE NORM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It seems that something is expected to be fundamentally different in the way that the shipping markets will be operating in the future, according to ...
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- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Georgia Ports Authority, United States
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Parliament of New Zealand
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- The University of Queensland
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Anglo American - United Kingdom
- Sojitz Corporation - Japan
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Coalindo Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Planning Commission, India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Eastern Coal Council - USA
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Independent Power Producers Association of India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Mercator Lines Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
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