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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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Monday, 06 August 12
3RD ANNUAL INDONESIA POWER
Press Release - 3rd Annual Indonesia Power is Indonesia’s premier power event, where commercial opportunities and new projects are identified. ...
Monday, 06 August 12
COAL EXPORTS COULD ADD $2B TO $6B ANNUALLY TO U.S. ECONOMY - HELLENIC SHIPPING
Business groups backing Pacific Northwest coal export proposals on Thursday lauded a new report that claims increased U.S. coal exports could bring ...
Sunday, 05 August 12
SUB-BIT INDONESIA COAL SWAPS ARE WAY UP
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for September 2012 delivery gain 1.36 percent on Friday (3 August 2012) closing W-o-W but gained& ...
Sunday, 05 August 12
INDONESIA'S ADARO TRIMS PRODUCTION FORECAST, CITES BAD ECONOMY - THE JAKARTA GLOBE
The Jakarta globe reported that, Adaro Energy, the country’s second-largest coal producer, has cut its annual production forecast to between ...
Sunday, 05 August 12
DRY BULK FREIGHT MARKET TO STAY WEAK NEXT COUPLE OF WEEKS - VISTAAR
COALspot.com - The freight market continued to soften further in all segments.
The BDI was down by 8.68 pct closing at 852 points. The cape index ...
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- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Borneo Indobara - Indonesia
- Deloitte Consulting - India
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Heidelberg Cement - Germany
- Global Green Power PLC Corporation, Philippines
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Standard Chartered Bank - UAE
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- TeaM Sual Corporation - Philippines
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Global Coal Blending Company Limited - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Singapore Mercantile Exchange
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Petron Corporation, Philippines
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- PowerSource Philippines DevCo
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- India Bulls Power Limited - India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
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