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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, 27 May 12
THE FREIGHT MARKET FROM INDONESIA TO INDIA WAS WEAK - VISTAAR
COALspot.com - The BDI continued to fall for the fourth straight week and the BDI fell by 9.38 pct this week closing at 1,034 points.
The Cape Si ...
Sunday, 27 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS HEADING TO SOUTH DIRECTION
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries have dropped this week by 5.43 percent an ...
Saturday, 26 May 12
DRY BULK SHIP OWNERS LOOKING TO CUT BACK ON TONNAGE SUPPLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The oversupply of dry bulk carriers has been the most prominent problem in the market today, pushing down rates and ‘strangling’ profita ...
Thursday, 24 May 12
DRY BULK MARKET RETREATS ON LACK OF CHINA DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market retreated yesterday on the back of lower Chinese demand for commodities such as coal and iron ore, typically hauled by dry bulk ...
Tuesday, 22 May 12
NEW ONE-YEAR TIME CHARTERS FOR TWO VESSELS OF EXCEL MARITIME CARRIERS LTD.
Excel Maritime Carriers Ltd. (NYSE: EXM), an owner and operator of dry bulk carriers and an international provider of worldwide seaborne transportat ...
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- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- SN Aboitiz Power Inc, Philippines
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- The State Trading Corporation of India Ltd
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Commonwealth Bank - Australia
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- The Treasury - Australian Government
- Central Electricity Authority - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Romanian Commodities Exchange
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
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