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Tuesday, 16 June 20
HIGHER IRON ORE PRICES OFFSET CORONAVIRUS-DRIVEN PRODUCTION RISK - FITCH RATINGS
 Lower iron ore production in Brazil, resulting from rising coronavirus infections, should only marginally affect the cash flow of Vale and other global mining companies due to higher prices, says Fitch Ratings. More than 10% of Vale’s production was affected last week when a local court suspended operations at its Itabira Complex due to employees testing positive for the virus.
Iron ore prices declined earlier this year due to demand concerns but later rebounded and are being supported by supply constraints caused by Vale’s 2019 dam accident and weather-related production disruptions. Prices increased to above USD100/dry metric ton (dmt) due to the news regarding the suspension.
Vale maintained its 2020 production guidance at 310 metric tons (mt) to 330mt with production expected to resume once all employees are tested and the company ensures no infected workers are working at the facilities. CRU Group believes it will be increasingly difficult for Vale to meet volume guidance considering the suspension, weak production in the Northern System and the effect heavy rainfall had on output at the start of 2020. The potential for additional infections increases employee absenteeism and production risk, as the number of people available to work in mines and processing plants falls, and other municipalities could take similar actions to stem the spread of the virus.
Material Environmental, Social and Governance (ESG) shortcomings, particularly in the areas of executing strategy and maintaining the well-being of employees, constrain Vale’s ‘BBB-’ credit ratings with a Stable Outlook. However, Vale is a low-cost producer with a leading market position, abundant reserves, and high-grade iron that commands a market premium, which reduces credit implications.
Fitch projects Vale will generate more than USD14 billion of EBITDA in 2020, assuming iron ore prices average USD75/dmt. FCF should be about USD5.0 billion, assuming capex is about USD4.7 billion and dividends are USD3.0 billion. Vale’s 2020 net debt/EBITDA is projected to be around 0.5x. These forecasts compare with USD17 billion of EBITDA, USD7 billion of FCF and net debt/EBITDA of 0.3x for the LTM ended March 31. Forecasts could prove conservative, given the rise in iron ore prices.
Similar dynamics apply to Anglo American’s operations at Minas-Rio. Fitch used for its rating case the bottom of existing production guidance of 22 million tonnes – 24 million tonnes and a price assumption of USD75/tonne in 2020 for the 62% Fe benchmark cost and freight (CFR) China price. The company has scheduled a one month production stoppage for inspection of its slurry pipeline for second-half 2020. If there were any pandemic-related disruptions in the coming months it might be possible to use the slot to re-schedule the maintenance work. Overall, based on production figures to date, upside from actual prices realized and material Brazilian real depreciation, there is unlikely to be any cash flow downside for the earnings outlook from a temporary disruption, if it occurs at Minas-Rio, to the existing rating case.
CRU’s forecast for benchmark 62% Fe fines CFR China is USD80/dmt as of May 2020. Iron ore demand in China remains robust as rising steel prices and margins for hot rolled coil producers above 10% encourage steel production. CRU expects strong steel production ahead of the wet season in southern China, which typically slows demand from the construction sector. Steel mills in China continue to operate with exceptionally low inventories and recent data shows mill inventories are declining further while port stocks remain steady at 108mt.
Source: Fitch Ratings
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Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
Friday, 19 June 20
INDIA'S COAL CONSUMPTION GROWTH IN 2019 SLOWEST SINCE 2001: BP STATS REVIEW - HINDU BUSINESS LINE
Growth in global energy markets slowed in 2019 in line with weaker economic growth, according to the bp Statistical Review of World Energy 2020. Th ...
Friday, 19 June 20
KOWEPO TO IMPORT 1,050,000 MT OF MIN 5300 NCV COAL FOR THREE YEARS
COALspot.com: Korera Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1,050k MT Min.5,300 kcal/kg NCV coal for t ...
Thursday, 18 June 20
INDIA: GOVT'S PLAN TO CUT COAL IMPORT GOES FOR A TOSS AS FY20 BREAKS LOGISTICS CHAIN; LOCAL OUTPUT STAGNANT - FINANCIAL EXPRESS
Weak logistics support and disrupted supply chain towards the end of the last financial year 2019-20 hit the government’s plan to cut coal im ...
Thursday, 18 June 20
INDIA: THERMAL PLANTS TO OPERATE BELOW 53% CAPACITY IN FY21 AS POWER DEMAND DIPS - BUSINESS STANDARD
The Plant Load Factor (PLF) of thermal power stations across the country is projected to dip below 53 per cent in this fiscal. Muted power demand f ...
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- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Price Waterhouse Coopers - Russia
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- PowerSource Philippines DevCo
- White Energy Company Limited
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Ministry of Mines - Canada
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Chamber of Mines of South Africa
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Aboitiz Power Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- Anglo American - United Kingdom
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