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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, 17 June 12
S7 & S8 ROUTES ARE LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI gained some increase after continues fall for several weeks.
The BDI increased by 47 points (up by 5.36 pct) closing at 92 ...
Saturday, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Tuesday, 12 June 12
ITACHA RESOURCES BUYS SARANA MARINE - INSIDER STORIES
Insider Stories reported that, coal mining company PT Itacha Resources, a joint venture between Anthoni Salim and Glenn Yusuf, announced that Itacha ...
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- Cement Manufacturers Association - India
- White Energy Company Limited
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- PNOC Exploration Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- Semirara Mining Corp, Philippines
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Kobexindo Tractors - Indoneisa
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- The Treasury - Australian Government
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- IHS Mccloskey Coal Group - USA
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Mercuria Energy - Indonesia
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Bayan Resources Tbk. - Indonesia
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Star Paper Mills Limited - India
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Timah Investasi Mineral - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Mercator Lines Limited - India
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
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