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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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Thursday, 13 September 18
SHIPPING IS INCREASINGLY CAUGHT IN THE TRADE WAR LINE OF CROSSFIRE - PETER SAND
Once again, the already long list of tariffed goods has been made even longer. Many more commodities were hit on 23 August, but September is likely ...
Wednesday, 12 September 18
THE INTERRELATIONSHIP BETWEEN LETTERS OF INDEMNITY AND CHARTERPARTY "TIME BAR" PROVISIONS - STANDARD CLUB
KNOWLEDGE TO ELEVATE
Introduction
A recent English Court of Appeal decision provides important guidance on the applicability of charterpar ...
Wednesday, 12 September 18
IS LNG POISED FOR A NEW GROWTH CYCLE? - WOOD MACKENZIE
Gas needs to work for its long-term sustainability. But the mood music is upbeat. Just 18 months ago the LNG market was depressed, anticipating an ...
Wednesday, 12 September 18
U.S. TOTAL COAL EXPORTS TO BE 107 MMST IN 2018 AND 101 MMST IN 2019 - EIA
EIA forecasts U.S. coal production will decline by 1% to 768 million short tons (MMst) in 2018, despite a 10% (10 MMst) increase in coal exports.
...
Wednesday, 12 September 18
MARINE BUNKERS: THE END OF THE WORLD AS WE KNOW IT - IBIA
KNOWLEDGE TO ELEVATE
The world of bunkers is heading for rapid and fundamental changes and not just because of the 0.50% sulphur cap in 2020. ...
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Showing 1621 to 1625 news of total 6871 |
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- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- The University of Queensland
- Coalindo Energy - Indonesia
- Aditya Birla Group - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Kideco Jaya Agung - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- VISA Power Limited - India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Directorate Of Revenue Intelligence - India
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Standard Chartered Bank - UAE
- Semirara Mining and Power Corporation, Philippines
- Central Java Power - Indonesia
- Uttam Galva Steels Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Coal Association
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Kartika Selabumi Mining - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- ASAPP Information Group - India
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
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