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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, 11 August 12
INDONESIAN COAL REFERENCE PRICE HAS LOST 27.78 PERCENT YOY
COALspot.com - Indonesian HBA fell again in August.
The monthly coal reference price for coal sales this month fell 3.32 percent. HBA fell ...
Saturday, 11 August 12
SUB-BIT INDONESIA COAL SWAPS SEEN MOVING IN THE RIGHT DIRECTION
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.29 percent W-o-W on Friday (10 August 2012) closing but lost 1 ...
Friday, 10 August 12
DRY BULK MARKET DROWNING FROM TONNAGE OVERSUPPLY - HELLENIC SHIPPING
The dry bulk market has been overflowing with new building vessels, despite the fact that demand is more or less (and minus the seasonal factors) ri ...
Thursday, 09 August 12
3RD ANNUAL SHALE GAS
Press Release - With the North American shale gas boom, IBC’s 3rd Annual Shale Gas explores optimal strategies to monetize Asia’s domest ...
Wednesday, 08 August 12
EXPLOITASI AIMS TO RAISE RP 2.7T FOR ACQUISITION - THE JAKARTA POST
The Jakarta Post reported that, publicly listed coal miner PT Exploitasi Energi Indonesia (CNKO) is seeking to raise Rp 2.7 trillion (US$286.2 milli ...
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- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Coal and Oil Company - UAE
- Renaissance Capital - South Africa
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Kobexindo Tractors - Indoneisa
- India Bulls Power Limited - India
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- VISA Power Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- London Commodity Brokers - England
- MS Steel International - UAE
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Australian Coal Association
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Borneo Indobara - Indonesia
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