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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, 29 August 12
COLOMBIA'S MINING BOOM: PART ONE - JOSEPH KIRSCHKE
COALspot.com - Colombia stands before one of the potentially largest, most diversified mining booms in the world. Untold reserves of gold, coal, cop ...
Wednesday, 29 August 12
SECOND HAND VESSELS IN HIGH DEMAND DESPITE SUMMER SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the slow summer season, ship owners appear to be rather keen in acquiring some modern second hand tonnage at "knock-down" prices. ...
Monday, 27 August 12
BUMI BOOKS $322.1 MILLION NET LOSS IN 1H 2012 IN SPITE OF 8.6 PERCENT INCREASE IN SALES REVENUE
PT Bumi Resources Tbk, the single largest coal producer and exporter in Indonesia announces its first half financial report for the ...
Monday, 27 August 12
OVER 200 FOREIGN COMPANIES AND ENERGY MAJORS EXPECTED AT 2ND MOGP SUMMIT IN YANGON
Singapore based CMT and Machinery & Solutions Co. Ltd (M&S) announce that the 2nd MOGP Summit will be held on 3-6 September at the Sedona ho ...
Sunday, 26 August 12
SOUTH AFRICAN COAL OVERVIEW
South Africa's indigenous energy resource base is dominated by coal.
Internationally, coal is the most widely used primary fuel, accounting for ...
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- Sakthi Sugars Limited - India
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Indian Oil Corporation Limited
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Wilmar Investment Holdings
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- GVK Power & Infra Limited - India
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Makarim & Taira - Indonesia
- Heidelberg Cement - Germany
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Coal and Oil Company - UAE
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- South Luzon Thermal Energy Corporation
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Timah Investasi Mineral - Indoneisa
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