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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, 17 September 18
SMALL PERCENTAGE OF THE WORLD FLEET WILL FIT SCRUBBERS - FORECASTS : METTE KRONHOLM FRAENDE
In recent months, there have been numerous reports of a strong pick-up in demand for scrubbers. On 1 January 2020, however, the number of ships fit ...
Saturday, 15 September 18
POWERING SUSTAINABLE DEVELOPMENT WITH LOW EMISSION COAL TECHNOLOGIES - WCA
In its 5th Strategic Energy Plan this year (2018), the Japanese Cabinet recognised coal as an important energy resource, necessary for the country& ...
Friday, 14 September 18
10 YEARS ON FROM LEHMAN, HOW IS SHIPPING'S "HANGOVER"? - CLARKSONS RESEARCH
On 15th September 2008, the collapse of Lehman Brothers crystallised the financial crisis and the onset the worst economic downturn for a century. ...
Thursday, 13 September 18
OPEC SEES SLOWER 2019 OIL DEMAND GROWTH, WARNS ON ECONOMY
Crude Oil Price Movements
In August, the OPEC Reference Basket declined by $1.01 m-o-m, settling at $72.26/b. Crude oil futures were also down ...
Thursday, 13 September 18
SUPRAMAX: INDO-INDIA COAL RUN WAS FIXED CLOSE TO $16000 ON ULTRA - FEARNLEYS
Capesize
Rates took a further drop in the beginning of the week, to later find a floor around mid-week reaching mid USD 7 level for c5 and just ...
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Showing 1616 to 1620 news of total 6871 |
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- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sakthi Sugars Limited - India
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Directorate Of Revenue Intelligence - India
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Siam City Cement PLC, Thailand
- Altura Mining Limited, Indonesia
- Australian Commodity Traders Exchange
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Therma Luzon, Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Parliament of New Zealand
- Orica Australia Pty. Ltd.
- Karaikal Port Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- Bangladesh Power Developement Board
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Deloitte Consulting - India
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- PNOC Exploration Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
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