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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, 05 July 12
BUMI ACHIEVES HIGHER SELLING PRICE IN FIRST QUARTER
COALspot.com - PT Bumi Resources Tbk (BUMI), Indonesia's largest coal producer and exporter, has successfully maintained a higher sales margin, des ...
Tuesday, 03 July 12
DRY BULK MARKET INCHED FORWARD AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched forward at the beginning of the new week, prior to the US holidays regarding the celebration of the 4th of July, which is ...
Monday, 02 July 12
ORPHEUS STRENGTHENS REVENUE STREAM WITH NEW ROYALTY AGREEMENT AT THE B2 COAL PROJECT
Orpheus Energy (ASX:OEG) is pleased to advise that it has executed a life of mine Royalty Agreement with Indonesian mining contractor PT Debbia Mini ...
Monday, 02 July 12
DRY BULK DEMAND TO RISE TO 3.6 BILLION TONNES IN 2012, BUT NEW BUILDING DELIVERIES ARE
In its latest analysis on the dry bulk market fundamentals, DVB Bank said that dry bulk cargo demand is forecast to rise to approximately 3.6 billio ...
Sunday, 01 July 12
AUSTRALIAS CARBON TAX - SUNIL K KUMBHAT
COALspot.com - Climate Change
Climate change and global warming have now become buzzwords the world over. The disastrous consequences for global ...
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- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- White Energy Company Limited
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- International Coal Ventures Pvt Ltd - India
- Thiess Contractors Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Bangladesh Power Developement Board
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Central Java Power - Indonesia
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Aditya Birla Group - India
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Altura Mining Limited, Indonesia
- Electricity Generating Authority of Thailand
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Eastern Coal Council - USA
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Indonesian Coal Mining Association
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Dalmia Cement Bharat India
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Neyveli Lignite Corporation Ltd, - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Planning Commission, India
- Heidelberg Cement - Germany
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Baramulti Group, Indonesia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
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