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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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Thursday, 12 July 12
SOUTHGOBI RESOURCES ANNOUNCES NOTICE OF INVESTMENT DISPUTE FILED AGAINST MONGOLIAN GOVERNMENT
Press Release - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi”) announced today that SGQ Coal Investment Pte. Ltd., a wholly ...
Wednesday, 11 July 12
HBA DROPPED SHARPLY IN JULY
COALspot.com - Indonesian HBA fell to lowest level since September 2010 in July 2012. The monthly coal reference price for coal sales this mon ...
Wednesday, 11 July 12
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 1.26 PER TON
COALspot.com - Sub-Bit FOB Indonesia Coal decline for a second day yesterday, according to SGX AsiaClear OTC Coal Swaps. The prices for shipments to ...
Tuesday, 10 July 12
DRY BULK MARKET RECORDS MODEST GAINS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher on Monday, with the Baltic Dry Index (BDI) ending the session up by 5 points to 1,162. Most markets were hig ...
Saturday, 07 July 12
INDONESIA-JAPAN RELATIONS TURN SOUR - THE JAKARTA POST
The Jakarta Post, the one of the leading Indonesian English new papers reported that, Bilateral relations between Indonesia and Japan have recently ...
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- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The University of Queensland
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Indo Tambangraya Megah - Indonesia
- Goldman Sachs - Singapore
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Borneo Indobara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Petron Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Rashtriya Ispat Nigam Limited - India
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Orica Mining Services - Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Anglo American - United Kingdom
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Australian Coal Association
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Sinarmas Energy and Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- IHS Mccloskey Coal Group - USA
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Planning Commission, India
- Agrawal Coal Company - India
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
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