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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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Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
Friday, 18 May 12
EXPORT TAX WILL ERODE PROFITS, INDONESIAN COAL EXEC COMPLAINS - THE JAKARTA GLOBE
The Jakarta Globe reported that, A 20 percent export duty the government has imposed on 14 mineral ore products will not only take a toll on mining ...
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- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- Vizag Seaport Private Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Central Electricity Authority - India
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Attock Cement Pakistan Limited
- Mercuria Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- Global Green Power PLC Corporation, Philippines
- Grasim Industreis Ltd - India
- PNOC Exploration Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Coalindo Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- The University of Queensland
- Commonwealth Bank - Australia
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Heidelberg Cement - Germany
- Coastal Gujarat Power Limited - India
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Planning Commission, India
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- SMC Global Power, Philippines
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