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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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Saturday, 25 August 12
FREIGHT RATES ARE EXPECTED TO BE STEADY NEXT WEEK - VISTAAR
COALspot.com - This week the indices showed some signs of improvement will all the segments moving up except for the handy size.
The BDI was marg ...
Saturday, 25 August 12
INDONESIAN COAL SWAP REMAINS STABLE AT LOW LEVEL
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery gain 0.804 percent W-o-W on Friday (24 August 2012) closing but lost 0. ...
Thursday, 23 August 12
INDONESIA-INDIA, LARGE ECO SUPRA FIXED AT USD 6K FOR DELIVERY SOUTH CHINA - FEARNLEYS AS
Handy
The market continued the same trend as last week, low activity and holidays in some countries.
Rate wise unchanged, with US Gulf/Continent ...
Thursday, 23 August 12
EGCO GROUP EXPANDS TOWARDS INTEGRATED ENERGY BUSINESS WITH INVESTMENT IN INDONESIAS COAL MINE
Electricity Generating Public Company Limited or EGCO Group, the Thailand’s first Independent Power Producer has continually invaded foreign m ...
Thursday, 23 August 12
EGCO GROUP ANNOUNCES 2 BILLION BAHT PROFITS IN Q2/2012
Successfully Establishes Integrated Energy Business and Strengthen Investments in ASEAN
Mr. Sahust Pratuknukul, President of Electri ...
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- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Coal and Oil Company - UAE
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Altura Mining Limited, Indonesia
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- The University of Queensland
- Sojitz Corporation - Japan
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Bhoruka Overseas - Indonesia
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Australian Commodity Traders Exchange
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- SMG Consultants - Indonesia
- Australian Coal Association
- Latin American Coal - Colombia
- Electricity Authority, New Zealand
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- MS Steel International - UAE
- ASAPP Information Group - India
- Bhatia International Limited - India
- PTC India Limited - India
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Mercator Lines Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
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