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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, 16 October 12
DRY BULK FREIGHT RATES COULD IMPROVE ON CHINESE STIMULUS AND WINTER CARGO DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO has given out its forecast for the next six weeks, in terms of freight rates for dry bulk carriers. According to them, Capesize TC Average rat ...
Monday, 15 October 12
IT'S STRICTLY COME CHARTERING - CLARKSON RESEARCH SERVICES
The charter market is a bit of a dance between ship owner and charterer: one leader, one follower; one step, two steps, turn... The dance is symbiot ...
Sunday, 14 October 12
SUB-BIT INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS: SOFT
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery lost 0.329 percent w- w but gained 0.248 percent d-d on Friday, 12 Oct ...
Sunday, 14 October 12
SUPRAMAX FREIGHT STEADY: PANAMAX FREIGHTS FIRM - VISTAAR
COALspot.com - The shipping market saw some hectic activity in the Cape and panamax sector and quite a lot of fixtures reported.
The BDI was up b ...
Friday, 12 October 12
HOW REAL IS THE THREAT OF PIRACY? - BIMCO
The threat of modern piracy remains serious, regardless of its seasonal variations and the fact that it is chiefly confined to the Indian Ocean, Gul ...
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- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- White Energy Company Limited
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Indika Energy - Indonesia
- Central Electricity Authority - India
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Coal and Oil Company - UAE
- Siam City Cement PLC, Thailand
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Indonesian Coal Mining Association
- GMR Energy Limited - India
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Rio Tinto Coal - Australia
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Trasteel International SA, Italy
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Africa Commodities Group - South Africa
- San Jose City I Power Corp, Philippines
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Power Finance Corporation Ltd., India
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Interocean Group of Companies - India
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Planning Commission, India
- Georgia Ports Authority, United States
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Savvy Resources Ltd - HongKong
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