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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, 12 October 12
INVESTMENT OPPORTUNITIES OCCUR IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Although 2012 has by now evolved into one of the most challenging years for global shipping industry, ship owners are scouting the second hand ship ...
Thursday, 11 October 12
SINGAPORE BASED COAL SOURCE AND SHIPPING BAGS 300K MT IMPORTED COAL SUPPLY CONTRACT FROM TNPL
COALspot.com - India-based paper manufacturer Tamil Nadu Newsprint and Papers Limited has awarded a tender for 300,000 mt of imported steam co ...
Thursday, 11 October 12
PANAMAX : SINCE LAST WEEK RATES HAS FIRMED FOR ALL TRADES - FEARNLEYS AS
Handy
The Atlantic market remains quiet due to lack of cargoes and more supply of ships. Rates from Continent to East Med were around USD 14k and B ...
Thursday, 11 October 12
DRY BULK MARKET STEADY AFTER CHINESE HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn't yet staged a solid rebound after last week's holidays in China, as many would have expected. Indeed, many analysts were ...
Wednesday, 10 October 12
NEW BUILDING MARKET ON A QUIET WEEK, DUE TO ASIAN HOLIDAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The newbuilding ordering activity has been more than quite during the course of the past week, as a result of holidays in both Korea and China. Acco ...
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- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Global Business Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- AsiaOL BioFuels Corp., Philippines
- Iligan Light & Power Inc, Philippines
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- VISA Power Limited - India
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Parliament of New Zealand
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
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