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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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Tuesday, 04 September 12
SHIP OWNERS' COMPETITION LEADS TO TANKER FIXTURES BELOW OPERATING COSTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Ship owners operating in the VLCC tanker markets are increasingly finding it difficult to obtain even breakeven rates for their vessels, as competit ...
Tuesday, 04 September 12
ORPHEUS SECURES ADDITIONAL SIGNIFICANT KINTAP COAL PROJECT IN SOUTH KALIMANTAN
COALspot.com - Indonesian coal producer, Orpheus Energy (ASX:OEG) has announced that it has secured a 50% equity ownership in an additional tenement ...
Monday, 03 September 12
SHIPOWNERS TO WAIT FOR FURTHER PRICE REDUCTIONS IN THE SECOND HAND VESSEL MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With September now upon us, shipbrokers are looking towards an interesting winter season, as ship owners are looking to capitalize on more second ha ...
Sunday, 02 September 12
ADAROS COAL ROYALTIES TO THE GOVERNMENT INCREASED BY 10.5 PERCENT Y-O-Y TO US$196.8 MILLION
COALspot.com - PT Adaro Energy Tbk (IDX: ADRO), the second largest power plant coal producer in Indonesia, announced its consolidated auditor-review ...
Saturday, 01 September 12
FALLING PRICES; BLEEDING MINERS
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost 4.070 percent and 0.422 percent respectively on W-o-W and D- ...
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- The University of Queensland
- Mjunction Services Limited - India
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Kartika Selabumi Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Altura Mining Limited, Indonesia
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Alfred C Toepfer International GmbH - Germany
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- Bukit Makmur.PT - Indonesia
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Generating Authority of Thailand
- Gujarat Mineral Development Corp Ltd - India
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Australian Coal Association
- Vijayanagar Sugar Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Meenaskhi Energy Private Limited - India
- VISA Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Ind-Barath Power Infra Limited - India
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
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