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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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Thursday, 20 September 12
DRY BULK INCHES FORWARD AFTER WEEKS OF BELOW PAR PERFORMANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has started to revive from its ashed, as the past couple of days, traders have reported an increased activity from China, result ...
Wednesday, 19 September 12
CHURCHILL STRENGTHENS LITIGATION TEAM WITH APPOINTMENT OF NICHOLAS SMITH AS MANAGING DIRECTOR
COALspot.com - Churchill Mining PLC (AIM: CHL) has announced that, Mr Nicholas Smith has joined the board of the Company and has been appointed as t ...
Wednesday, 19 September 12
DRY BULK TERMINALS SINGAPORE
Press Release - Dry bulk terminals are used all around the world to handle large quantities of bulk materials, like minerals, grains, etc. In today& ...
Tuesday, 18 September 12
JORC CODE REVISION - EXPOSURE DRAFT RELEASED FOR COMMENT
COALspot.com - The Australasian Joint Ore Reserves Committee (JORC) has today released for public comment the exposure draft of the JORC Code (2012) ...
Monday, 17 September 12
YEAR TO DATE, BUMA PRODUCED 231.1 MILLION BCM OF OVERBURDEN
COALspot.com - PT. Delta Dunia Makmur Tbk has removed 31.5 million bcm (+6.0 percent YoY) overburden in August 2012 totaled 31.5 million bcm ( ...
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- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Commonwealth Bank - Australia
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Australian Coal Association
- Orica Australia Pty. Ltd.
- ICICI Bank Limited - India
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Central Electricity Authority - India
- Economic Council, Georgia
- PTC India Limited - India
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- The University of Queensland
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- Indika Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- San Jose City I Power Corp, Philippines
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
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