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Monday, 27 July 09
COKING COAL, IRON-ORE LIKELY TO BENEFIT NON-INTEGRATED STEEL PRODUCERS
 Economictimes reported that, The second half of the financial year 2008-09 was one of the toughest periods for steel companies, especially the non-integrated players without access to captive sources of raw material. The double whammy of falling sales realisation and higher input costs pulled down operating profit margins significantly.
The non-integrated producers continued to pay higher raw material prices as a part of long-term contracts signed during the beginning of the year. However, as old contracts have come to an end and new ones are being signed, these companies are breathing a sigh of relief.
The new contracts have taken into consideration the current market realty. The prices of two key inputs –
–iron ore and coking coal – have come down more than 50% in the spot market. As per reports, steel firms have signed long-term contracts for coking coal at around $110-120 per tonne and iron ore at $65-70 per tonne.
The new contract prices mark a decline of around two-thirds and one-third from their yearago levels for coking coal and iron ore, respectively. Steel prices have also fallen sharply during the same period. Because of these developments, it is essential to understand the impact of the new prices on the profitability of major steel producers, especially the non-integrated ones, for the next few quarters.
Steel prices in a number of countries have been regulated in past year, and India is no exception. Current international steel prices are 50% lower than year-ago levels and in India the decline has been 25-35 %. Accordingly, depending on the company’s market (domestic and overseas) exposure, the impact on profitability of new long-term contract will vary.
Going by international prices, a company with an operating margin of around 25% last year is expected to see a contraction in margin by around 1,000-1 ,300 basis points compared to year-ago levels. It means the fall in steel product prices outweighs the drop in input costs. The only solace for such a company is the improvement in margin from the previous two quarters. Sequentially, there could be an improvement of more than 500-1 ,000 basis points in the operating margin to 10-15 %.
For instance, many international steel producers reported either losses or a 5-8 % operating margin during the Mar ’09 quarter. Such companies are definitely going to see better days ahead. In India, Tata Steel, which has significant operations in Europe, is going to be one of the key beneficiaries. The operating margin of Corus, however, is not expected to exceed 2%. The new pricing will have a bigger impact on domestic companies.
Domestic steel prices have not fallen much due to government intervention and relatively higher domestic demand. Also, coking coal, which accounted for around two-thirds of raw material cost last year, has witnessed a much sharper decline in prices compared to iron ore. And most of the coking coal consumed in India is imported and its pricing depends more on the international environment rather than the domestic market. Hence new coking coal contract prices will capture the poor international market conditions.
The benefit of new long-term contracts for domestic players would depend on factors such as the extent of dependence on external suppliers for raw materials, actual contract prices and the month from which the contract became effective, among others. Higher the dependence on external suppliers, more the benefit.
Of the top five listed steel companies, JSW Steel and Ispat Industries are likely to benefit the most. The average operating margin from the September quarter onwards is expected to expand by around 1,000-1,500 basis points compared to the Mar ’09 quarter. The June quarter, however, will see a partial impact, depending on when the new contracts came into force.
Other top players that are likely to benefit are Steel Authority of India (Sail) and Jindal Steel & Power. Both of them are self-sufficient in iron ore but depend on outside suppliers for coking coal. The positive impact on the operating margin of these companies on account of the new prices would not be more than 500 basis points though.
Source: Economic Times - India Times
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Thursday, 09 July 09
COAL AND OIL GROUP TO INVEST $300 MN TO BUY SHIPS AND ACQUIRE COAL MINE
Coal & Oil Group is planning to invest around $300 million (around Rs 1,500 crore) to buy new ships and to acquire coal mines. The company is pl ...
Thursday, 09 July 09
NO TRADE ON AUSTRALIA'S ASX COAL FUTURES DEBUT
*ASX's deliverable thermal coal futures debut without trade
*ASX says futures could present new arbitrage opportunities
The debut of Australia ...
Wednesday, 08 July 09
GERMAN COAL PRODUCTION DECREASED BY 31% TO ROUND 3.4 MILLION TON IN 1Q 2009 - COAL IMPORTERS ASSOCIATION, HAMBURG
COALspot.com (Germany):
World Coal Market
According to analysis of VEREIN DER KOHLENIMPORTEURE E.V. , On a quantity basis the s ...
Wednesday, 08 July 09
HUADIAN POWER BUYS INTO COAL MINERS
Huadian Power International Corporation - China's largest independent power producerCannounced Tuesday in a filing to the Shanghai Stock Exchange ...
Tuesday, 07 July 09
RICHARDS BAY TERMINAL COAL EXPORTS ROSE 7.2% IN JUNE
Richards Bay Coal Terminal Ltd., Africa’s largest coal-export facility, said shipments rose 7.2 percent in June from a year earlier.
Export ...
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- Ministry of Mines - Canada
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Videocon Industries ltd - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Global Business Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Dalmia Cement Bharat India
- ICICI Bank Limited - India
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Ambuja Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Malabar Cements Ltd - India
- Renaissance Capital - South Africa
- Planning Commission, India
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Gujarat Sidhee Cement - India
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Bhushan Steel Limited - India
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- CNBM International Corporation - China
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
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