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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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Wednesday, 27 June 12
DIRECTORATE GENERAL OF MINERAL AND COAL OF INDONESIA INTRODUCES ON-LINE SYSTEM FOR MINING PRODUCTS EXPORT APPROVAL
COALspot.com - Directorate General of Mineral and Coal of Indonesia has released "Clear and Clean" certificate for another 33 coal miners ...
Monday, 25 June 12
RIO TINTO MAKES FIRST COAL SHIPMENT FROM MOZAMBIQUE
Rio Tinto has started exporting premium hard coking coal from its Benga Mine in the Moatize Basin in Mozambique. The first shipment of 34,000 tonnes ...
Sunday, 24 June 12
SUPRAMAX FREIGHT MARKET FIRMED UP FROM INDONESIA TO INDIA - VISTAAR
COALspot.com - This week all the segments gained and marked was firm in the Supramax and Handy size sector, where as the Cape and Panamax inde ...
Saturday, 23 June 12
COAL PRICES APPETITE FOR ROLLER-COASTER RIDES
COALspot.com - SGX AsiaClear OTC Coal Swaps have suffered something of a roller-coaster ride in terms of prices during this week. SGX’s Indone ...
Friday, 22 June 12
PRESENT SPOT WEAKNESS IS TEMPORARY, SEASONAL AND RISE AS WINTER APPROACHES - BUMI
COALspot.com - PT Bumi Resources Tbk, the world’s one of the largest coal producer and Indonesia’s largest multi grade coal miner has no ...
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- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Singapore Mercantile Exchange
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Siam City Cement PLC, Thailand
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Rio Tinto Coal - Australia
- Banpu Public Company Limited - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Maheswari Brothers Coal Limited - India
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Larsen & Toubro Limited - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Australia Pty. Ltd.
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Independent Power Producers Association of India
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Orica Mining Services - Indonesia
- Australian Coal Association
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Bukit Makmur.PT - Indonesia
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Economic Council, Georgia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- CNBM International Corporation - China
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
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