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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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Wednesday, 12 September 18
SHIPPING MARKET INSIGHT - THEODORE NTALAKOS
A recovery in the shipping market since last year has buoyed optimism amongst the people in the industry. Yet if you are to ask most ship-owners if ...
Monday, 10 September 18
HANDYSIZE: PERIOD ACTIVITY REMAINED LIMITED WITH A 37,000DWT REPORTEDLY FIXED FOR FOUR TO SIX MONTHS AT $10,500, OPEN IN MALAYSIA IN MID-SEPTEMBER - BALTIC BRIEFING
Capesize
Rates came under pressure for the big ships last week, despite paper values holding at reasonable levels as these trades continued to ...
Thursday, 06 September 18
INDONESIAN COAL PRICE REFERENCE FALLS FOR FIRST TIME IN 3 MONTHS
COALspot.com: The benchmark price of Indonesian thermal coal falls for first time in three months.
According to the latest min ...
Thursday, 06 September 18
SUPRAMAX: SE ASIA-INDO ROUNDS WITH COAL HAVE BEEN CONCLUDED IN THE $13000S RANGE - FEARNLEYS
Capesize
The big ships experiencing a bump in the road towards what is commonly expected to be by far the best period of this year. Average dai ...
Wednesday, 05 September 18
ASIAN DEMAND COULD CREATE DEFICIT IN GLOBAL LNG MARKET - FITCH RATINGS
Growing gas demand from Asia, particularly from China, could swing the liquefied natural gas (LNG) market into a deficit by 2022-2025, Fitch Rating ...
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Showing 1626 to 1630 news of total 6871 |
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- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Indonesian Coal Mining Association
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Chamber of Mines of South Africa
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- GMR Energy Limited - India
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- The University of Queensland
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
- London Commodity Brokers - England
- PTC India Limited - India
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Edison Trading Spa - Italy
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Thai Mozambique Logistica
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Energy Link Ltd, New Zealand
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Renaissance Capital - South Africa
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