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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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Saturday, 22 September 18
SHIPOWNERS URGENTLY NEED A FUEL-MANAGEMENT PLAN - METTE KRONHOLM FRAENDE, BIMCO
With the majority of ship operators expected to choose low-sulphur fuel over scrubbers to comply with the new IMO sulphur cap regulation, all eyes ...
Saturday, 22 September 18
GERMANY'S MOVE TO SCRAP COAL WILL COST TAXPAYERS - BRIAN PARKIN | WILLIAM WILKES
Chancellor Angela Merkel’s plan to close Germany’s remaining coal-fired power stations will drive up subsidies for regions that mine th ...
Saturday, 22 September 18
FITCH RATINGS: WORLD GROWTH FORECAST CUT ON US-CHINA TRADE BATTLE
Protectionist US trade policies have now reached the point where they are materially affecting what remains a strong global growth outlook, with th ...
Tuesday, 18 September 18
COOLING OUTLOOK FOR COAL - KATE JONES
At a time of increasing focus on the renewables market as the world seeks to clean up its act to prevent climate change, what is the outlook like f ...
Monday, 17 September 18
GLENCORE RETURNS TO JAPAN COAL TALKS SCUPPERED BY HIGH PRICES - BLOOMBERG
Mining giant Glencore Plc and Japanese utilities have resumed thermal coal supply negotiations, restarting talks that fell apart earlier this year ...
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Showing 1611 to 1615 news of total 6871 |
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- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Parliament of New Zealand
- PTC India Limited - India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Central Java Power - Indonesia
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Carbofer General Trading SA - India
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Interocean Group of Companies - India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Singapore Mercantile Exchange
- Australian Coal Association
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Ministry of Finance - Indonesia
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Banpu Public Company Limited - Thailand
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Aboitiz Power Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
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