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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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Sunday, 23 September 12
AN ANOTHER UNSTABLE WEEK FOR INDONESIAN COAL SWAPS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.10 percent and 0.916 percent WOW and DOD respectively ...
Sunday, 23 September 12
INDIA IMPORTED 11.40 PERCENT MORE INDONESIAN COAL IN AUGUST
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 26,451,565* tons of coal in August 2012, compared to 27.88* mill ...
Saturday, 22 September 12
SOFT BUNKER PRICES KEEP INDONESIA TO INDIA FREIGHTS STABLE - VISTAAR
COALspot.com - The freight market overall remained buoyant with all indices up except for Panamax index. The main effect seems to be increased shipm ...
Friday, 21 September 12
SHIP BREAKING ACTIVITY REACHES NEW RECORDS, AS ALREADY 2012 LEVELS HAVE SURPASSED THE WHOLE OF 2011 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The vast oversupply of vessels, most notably in the dry bulk shipping sector, has forced ship owners to intensify their efforts towards recycling th ...
Thursday, 20 September 12
SUPRAMAX : INDO-INDIA ROUNDS WERE AROUND USD 12K - FEARNLEYS
Handy
Not a bad week for Supramax tonnage, if we compare Supramax developments to the bigger size tonnage. The rates have basically remained unchan ...
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- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- The University of Queensland
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Cigading International Bulk Terminal - Indonesia
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- European Bulk Services B.V. - Netherlands
- Goldman Sachs - Singapore
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Dalmia Cement Bharat India
- Sree Jayajothi Cements Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Indo Tambangraya Megah - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Antam Resourcindo - Indonesia
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
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