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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, 14 August 12
SAKARI SIGNS HEADS OF AGREEMENT TO ACQUIRE SIX COAL CONCESSIONS IN INDONESIA
COALspot.com - Sakari has signed a Heads of Agreement (HOA) to acquire a 100% interest in up to six IUPs, covering an area of over 29,000 hectares, ...
Tuesday, 14 August 12
UNCERTAIN FUTURE FOR DRY BULK PANAMAX SHIPS - DREWRY / HELLENIC SHIPPING
The dry bulk shipping market is in a poor state, with the Capesize segment the worst of all. Unfortunately, the latest analysis from Drewry Maritime ...
Monday, 13 August 12
5TH VIETNAM PORTS AND LOGISTICS 2012
Press Release - Co-hosted by VINAMARINE, the 5th Vietnam Ports and Logistics2012 will feature dedicated sessions on port and transport infrastructur ...
Monday, 13 August 12
ACTIVE DRY BULK FLEET INCREASES BY 8% SO FAR IN 2012 IN TERMS OF TONNAGE CAPACITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
It’s no wonder that the dry bulk market has been tethering since the start of the year. the overflow of tonnage has been so enormous, that eve ...
Sunday, 12 August 12
COAL FREIGHT RATES FALL FLAT TO SOFT ON OVERSUPPLY, WEAK DEMAND - VISTAAR SINGAPROE
COALspot.com - The BDI continued its fall 10th August.
This week all segments were down including BDI down by 9.15 pct closing at 774 points .The ...
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- Baramulti Group, Indonesia
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- SMC Global Power, Philippines
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Ministry of Transport, Egypt
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- GAC Shipping (India) Pvt Ltd
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Australian Coal Association
- GMR Energy Limited - India
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Videocon Industries ltd - India
- Minerals Council of Australia
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Vedanta Resources Plc - India
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Goldman Sachs - Singapore
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- PTC India Limited - India
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Wilmar Investment Holdings
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Sical Logistics Limited - India
- Posco Energy - South Korea
- Romanian Commodities Exchange
- The Treasury - Australian Government
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Samtan Co., Ltd - South Korea
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Petron Corporation, Philippines
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