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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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Monday, 11 June 12
BAHANA FORECASTS THE COAL PRICES WILL FALL FURTHER
COALspot.com - Growing US coal supplies + low shipping costs = Asia as target.
According to Irwan Budiarto analyst at Bahana Securities, US ...
Monday, 11 June 12
ASIAN COAL TRADING COMMUNITY EMBRACES API 5 AND API 8
Press Release - The Asian coal trading community is embracing the API 5 and API 8 indexes for its swap contracts.
The API 5 index represents 5,50 ...
Sunday, 10 June 12
FREIGHT MARKET EXPECTED TO REMAIN WEAK FOR NEXT FEW WEEKS - VISTAAR
COALspot.com - The BDI continued to fall this week and down by 2.99 pct closing at 877 points.
The Cape index also was down by 5.78 pct closing a ...
Friday, 08 June 12
ESSAR ENERGY RECEIVES FINAL APPROVAL FOR INDONESIAN COAL BLOCK
COALspot.com - Essar Energy plc, the India-focused integrated energy company, today announced that it has received final ‘Pinjam Pakai’ ...
Friday, 08 June 12
MINISTER DENIES COAL EXPORT TAX PLAN, ENDORSES RESTRICTIONS - THE JAKARTA POST
The Jakarta post, one of the leading english news paper in Indonesia reported that, Energy and Mineral Resources Minister Jero Wacik has denied that ...
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- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
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- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
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- New Zealand Coal & Carbon
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- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
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- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Indian Oil Corporation Limited
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
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- VISA Power Limited - India
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- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Toyota Tsusho Corporation, Japan
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Electricity Generating Authority of Thailand
- White Energy Company Limited
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
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- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Deloitte Consulting - India
- Ceylon Electricity Board - Sri Lanka
- Minerals Council of Australia
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Planning Commission, India
- Metalloyd Limited - United Kingdom
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- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Orica Mining Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Global Business Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- London Commodity Brokers - England
- Timah Investasi Mineral - Indoneisa
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Wilmar Investment Holdings
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- Marubeni Corporation - India
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