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