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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, 21 July 12
THE FREIGHT RATES ARE EXPECTED TO BE FLAT TO SOFT NEXT WEEK - VISTAAR
COALspot.com - The freight market was soft this week as all the segments were down.
The BDI was down by 6.58 pct closing at 1,037 points and the ...
Saturday, 21 July 12
INDONESIAN COMPANIES ABM INVESTAMA AND AVRA ASIA WORK OUT LONG-TERM CONTRACT - THE JAKARTA GLOBE
The Jakarta Globe, one of the leading English news papaer in Indonesia reported that, ABM Investama, a company with diversified interests in coal mi ...
Friday, 20 July 12
INDONESIA-INDIA SUPRAS BEING FIXED AT $ 10K
Handy
After a stable last week, the Handysize market has experienced softening rates in the Atlantic. Ships are ballasting from India into the Atla ...
Friday, 20 July 12
HANDYSIZES PROVE RATHER ATTRACTIVE AMONG OTHER SHIPS, IN TERMS OF FUTURE RETURNS ON INVESTMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The Handysize segment of the dry bulk market appears to offer the best incentive among other ship types, for a ship owners to invest in, says Interm ...
Wednesday, 18 July 12
TAIWAN POWER COMPANY TO IMPORT 0.588 MILLION TONS OF LOW ASH AND EXTRA LOW SULFUR SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 588,000 MT tons of extra low sulfur sub-bituminous coal for Taipower thermal power plant thro ...
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- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Singapore Mercantile Exchange
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Borneo Indobara - Indonesia
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Intertek Mineral Services - Indonesia
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- The University of Queensland
- Antam Resourcindo - Indonesia
- SMG Consultants - Indonesia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Bhushan Steel Limited - India
- Economic Council, Georgia
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- ASAPP Information Group - India
- Eastern Energy - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Rio Tinto Coal - Australia
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
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