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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, 16 September 12
GLOBAL LOW DEMAND ; INDONESIA COAL AND CFR SOUTH CHINA COAL SWAPS DIP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for November 2012 delivery lost 1.345 percent W-O-W on Friday, 14 September 2012, closing but gai ...
Sunday, 16 September 12
THE FREIGHT RATES FROM INDONESIA TO INDIA EXPECTED TO BE STEADY - VISTAAR
COALspot.com - The freight market was mixed with most indices closing positive except for the Panamax index.
The main sentiment seems to be ...
Saturday, 15 September 12
FINANCE MINISTRY OPPOSES TAX INCENTIVE PLAN FOR COAL MINERS - JP
The Jakarta Post reported that, the Finance Ministry has turned down the idea of providing a fiscal incentive to the country’s coal mining ind ...
Friday, 14 September 12
DRY BULK MARKET LOOKS TOWARDS CHINA FOR SOME POSITIVE NEWS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the dry bulk market freight rates submerged underwater for a large part of the year, dry bulk owners are looking for some positive enhancement ...
Friday, 14 September 12
GOVT OFFERS CONDITIONAL TAX HOLIDAY TO AILING COAL MINERS - JP
The Jakarta Post, one of the leading English news paper in Indonesia reported that, acknowledging difficulties encountered by coal miners due to a p ...
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- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- Uttam Galva Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Planning Commission, India
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Vijayanagar Sugar Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Carbofer General Trading SA - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Cigading International Bulk Terminal - Indonesia
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Deloitte Consulting - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Parliament of New Zealand
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- The University of Queensland
- Asmin Koalindo Tuhup - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Port Waratah Coal Services - Australia
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Economic Council, Georgia
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Cement Manufacturers Association - India
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- Independent Power Producers Association of India
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- Meralco Power Generation, Philippines
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