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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, 05 April 12
COAL EXPORT TAX: MATTER OF CONCERN FOR INDIA - SUNIL K KUMBHAT
COALspot.com - Since the issuance of Indonesian Mining law in 2009, miners have increased their activities in exploring , ex ...
Thursday, 05 April 12
AKR COAL FIRST EXPORT SHIPMENT OF COAL SEABORNE
PT Anugrah Karya Raya (AKR Coal) subsidiary of PT AKR Corporindo Tbk., Indonesia’s leading integrated supply chain solutions provider and larg ...
Thursday, 05 April 12
DRY BULK MARKET STALLS AS TREND IS REVERSED - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has halted its month-long rally, with the BDI (Baltic Dry Index) retreating yesterday for a second consecutive session. Industry ...
Wednesday, 04 April 12
OIL MAY JUMP TO $150PB IF IRAN ATTACKED: EXPERT - KUNA / HELLENIC SHIPPING
Prices of oil will not drop below level of $100 per barrel and may jump to $150 pb in the coming two months, according to the prominent Kuwaiti expe ...
Wednesday, 04 April 12
CHURCHILL MINING TO ACCELERATE INTERNATIONAL ARBITRATION AGAINST INDONESIA
Churchill Mining plc (AIM: CHL), advises that notations on the Indonesian Supreme Court's register of cases shows the Supreme Court has rejected th ...
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- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Videocon Industries ltd - India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- MS Steel International - UAE
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Orica Mining Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Bhatia International Limited - India
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Indian Energy Exchange, India
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Sarangani Energy Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Planning Commission, India
- VISA Power Limited - India
- ICICI Bank Limited - India
- Minerals Council of Australia
- Wilmar Investment Holdings
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Makarim & Taira - Indonesia
- Semirara Mining Corp, Philippines
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- Borneo Indobara - Indonesia
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coal and Oil Company - UAE
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Coalindo Energy - Indonesia
- Eastern Energy - Thailand
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
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