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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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Thursday, 26 April 12
TAIPOWER TO BUY 1.15 MILLION TONS OF 5000 GAR COAL
COALspot.com - Taiwan Power Company intends to procure 1.125million tons of sub-bituminous coal for Taipower thermal power plant through open tender ...
Thursday, 26 April 12
TAIPOWER TO BUY 375,000 MT OF 4800 GAR COAL
COALspot.com - Taiwan Power Company intends to procure 375,000 metric tons of low sulfur sub-bituminous coal for Taipower thermal power plant ...
Thursday, 26 April 12
ADK SHIPPED 28,000 TONNES OF COAL THIS MONTH
COALspot.com - Orpheus Energy (ASX:OEG) has announced that four coal barges carrying a total of approximately 28,000 tonnes of ADK (Alam Duta K ...
Thursday, 26 April 12
DRY BULK CARRIERS RENTER FLEET AFTER IDLING, ON MARKETS RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market seems to be back on track, not only solidifying the gains of the past couple of weeks, but also racing to new heights, recuperra ...
Thursday, 26 April 12
PANAMAXES AGAIN EARN MORE THAN CAPESIZES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of demand for Panamaxes has led the dry bulk market to new higher ground on Monday, with the Baltic Dry Index (BDI) reaching 1,090 ...
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- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- The University of Queensland
- Samtan Co., Ltd - South Korea
- Miang Besar Coal Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Bukit Asam (Persero) Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- IEA Clean Coal Centre - UK
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Vedanta Resources Plc - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
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