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