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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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Sunday, 01 July 12
DSP OF SGX ASIACLEAR OTC COAL SWAP'S THIS WEEKS MOVEMENTS SLIGHTLY POSITIVE
COALspot.com - SGX AsiaClear OTC Coal Swaps have recovered slightly this week and Q4 deliveries are also showing positive direction.
SGX’s ...
Saturday, 30 June 12
THE FREIGHT RATES ARE EXPECTED TO BE STEADY TO FIRM NEXT WEEK - VISTAAR SINGAPORE
COALspot.com – The BDI was up by 2.66 pct (up by 26 points) closing at 1,004 points crossing the 1000 point barrier this week.
The c ...
Friday, 29 June 12
INDONESIAN PRODUCERS ARE PLANNING TO CUT PRODUCTION IF COAL PRICES FALL FURTHER
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 31.54* million tons of coal in May 2012, compared to 31.86* mill ...
Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order ...
Thursday, 28 June 12
DRY BULK MARKET HIGHER ON CAPESIZE OPTIMISM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher yesterday, as the BDI (Baltic Dry Index) ended up by 0.71% to 988 points. Most ship types were up, with the ...
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- Vizag Seaport Private Limited - India
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- PTC India Limited - India
- Latin American Coal - Colombia
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Indian Energy Exchange, India
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Ind-Barath Power Infra Limited - India
- Parliament of New Zealand
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Planning Commission, India
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Sinarmas Energy and Mining - Indonesia
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Kepco SPC Power Corporation, Philippines
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
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