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