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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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Wednesday, 10 October 12
TAPPING OPPORTUNITIES WITHIN GLOBAL ECONOMIC PERSPECTIVE
Press Release: Mining sector will continue to play a significant role in supporting industrial and economic development in Indonesia which is curren ...
Tuesday, 09 October 12
REALM RESOURCES RECOMMENCES DRILLING AT KATINGAN RIA COAL PROJECT
COALspot.com : Realm Resources Ltd. (ASX) has announced that it has commenced work on the phase three technical programme at its Katingan Project in ...
Sunday, 07 October 12
INDONESIAN GOVERNMENT DECLARED HBA FELL AGAIN IN OCTOBER
COALspot.com - The Indonesian government’s declared coal reference price has lost US$ 0.17 per MT M-M.
The monthly coal referen ...
Saturday, 06 October 12
CFR SOUTH CHINA COAL SWAPS FOR DECEMBER'13 DELIVERY GAINED 1.3 PERCENT W-W
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for December 2012 delivery gained 0.098 percent and 0.164 percent W-W and D-D respectively o ...
Saturday, 06 October 12
FREIGHT MARKET IS LIKELY TO PICK AFTER THE HOLIDAYS IN CHINA - VISTAAR
COALspot.com - The freight market appeared to be seeing some increase BDI up by 14.23 pct closing at 875 points. The Cape and Panamax index also saw ...
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- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- MS Steel International - UAE
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Therma Luzon, Inc, Philippines
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Australian Coal Association
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Altura Mining Limited, Indonesia
- The University of Queensland
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Orica Mining Services - Indonesia
- Siam City Cement - Thailand
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Ministry of Mines - Canada
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Globalindo Alam Lestari - Indonesia
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
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