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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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- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- AsiaOL BioFuels Corp., Philippines
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Directorate General of MIneral and Coal - Indonesia
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Chamber of Mines of South Africa
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Xindia Steels Limited - India
- The Treasury - Australian Government
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- The University of Queensland
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Standard Chartered Bank - UAE
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Planning Commission, India
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Orica Australia Pty. Ltd.
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Petron Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- South Luzon Thermal Energy Corporation
- Independent Power Producers Association of India
- Lanco Infratech Ltd - India
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
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