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Friday, 28 September 18
FITCH RATINGS: METALLURGICAL COAL MINERS MAY CURB COSTS AS PRICES SLIP
Strong cost inflation in the global metallurgical coal sector suggests that miners may focus on cost controls as prices decline from their current high levels over the next 18 months, say Fitch Ratings and CRU. However, mining companies rated by Fitch are well-positioned for any potential squeeze on margins, as their costs are relatively low by global standards and, in most cases, their diversified business operations limit exposure to the sector.
CRU estimates that global costs in the metallurgical coal sector increased by 18% in 2017 and continued to rise in 2018. Severe weather has played a role in Australia, causing supply-chain disruption that led to demurrage penalties and increased storage costs for unshipped coal. However, costs have also been pushed up globally by higher oil prices and attempts by mining companies to maximise production to take advantage of high prices.
Coking coal prices are currently sufficiently high that cost inflation has not undermined profitability. CRU estimates that the seaborne industry generated an average cash margin of 40% in 2016-2017, and profitability has remained very strong this year.
The metallurgical coal market is unlikely to become oversupplied in the near term, and Fitch does not expect prices to fall deep into the cost curve, as they did during 2014-2016. However, prices have already eased off from their peak of USD260/tonne in 4Q16, and are likely to decline further as supply constraints continue to ease. Fitch’s current assumptions are that hard coking coal prices will average USD185/tonne this year and USD140/tonne thereafter. These declines could put pressure on some less competitive mining companies to reduce costs to protect margins.
Among Fitch-rated companies, Teck Resources (BB+/Positive) has the largest exposure to the metallurgical coal sector, which accounted for 60% of its segment EBITDA in the 12 months to 30 June 2018. The company is among those that have increased use of contractors and rented more mining equipment to raise short-term output, which has pushed up marginal costs. Nevertheless, Teck is still in the lower half of the global cost curve (FOB port) and its costs remain lower in US dollar terms than in 2014. Teck has also taken advantage of strong margins and cash flow to reduce leverage. The main credit issue facing the company is the prospect of continued project spending and its funding resulting in weaker cash flows and higher financial leverage.
BHP Billiton (A/Stable) and Anglo American (BBB-/Stable) also have significant metallurgical coal assets, mostly located in Australia, where coal mines are generally relatively low cost by global standards. BHP and Anglo also have diversified operations, with metallurgical coal accounting for only around 16% of BHP Billiton’s revenue and 17% of Anglo’s in the financial year ending June 2017. There could be increased focus on improving efficiency in the Australian coal sector, as already signalled by some companies, but CRU and the Australian government expect production to continue to grow strongly over the next four years.
Meanwhile, mining service companies and earthmoving equipment manufacturers should continue to benefit from rising demand and a better pricing environment as miners continue with new projects and increase production. Emeco (B/Stable), which has the largest exposure to metallurgical coal among Fitch-rated companies, reported improved EBITDA margin as the commodity sector recovered. It also improved its leverage position. Further leverage improvements are likely in 2019-2021 due to equity-funded acquisitions and a tight rental equipment market in Australia.
Source: Fitch Ratings
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Monday, 01 October 18
A NO-DEAL BREXIT WILL UNDOUBTEDLY HAVE CONSEQUENCES FOR IMPORTERS AND EXPORTERS - KATE JONES, THE BALTIC BRIEFING
If you live in the UK, you might be finding it difficult to get away from the Brexit debate. “Hard Brexit”, “soft Brexit”, ...
Friday, 28 September 18
INDONESIA 2018 COAL OUTPUT TARGET NOW AROUND 507 MLN T - ENERGY MINISTRY : REUTERS
Indonesia has increased its 2018 coal production target to around 507 million tonnes from a previous target of 485 million tonnes, the Energy Minis ...
Wednesday, 26 September 18
IS YOUR CHARTER PARTY READY FOR 2020? - METTE KRONHOLM FRAENDE, BIMCO
As the deadline for the IMO’s global low-sulphur fuel requirements fast approaches, it is necessary to carefully check the bunker clauses in ...
Wednesday, 26 September 18
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Despite the fact that the dry bulk SnP market saw an admittedly busy summer season, there is a noticeable slowdown in activity during the past thre ...
Tuesday, 25 September 18
THE INCONVENIENT TRUTH OF RISING COAL PRICES - FORBES
Coal prices are not supposed to be rising as governments tighten environmental controls but that’s precisely what is happening at the premium ...
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Showing 1606 to 1610 news of total 6871 |
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- Chettinad Cement Corporation Ltd - India
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Electricity Authority, New Zealand
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Bukit Makmur.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Coastal Gujarat Power Limited - India
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Minerals Council of Australia
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- AsiaOL BioFuels Corp., Philippines
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Star Paper Mills Limited - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Grasim Industreis Ltd - India
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Australian Coal Association
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- The University of Queensland
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Therma Luzon, Inc, Philippines
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Offshore Bulk Terminal Pte Ltd, Singapore
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