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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, 06 June 20
KOREA SOUTH-EAST POWER CO INVITED COAL BIDS FOR MIN 5600 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 270,000 Tons (MT) min. 5600 NCV co ...
Friday, 05 June 20
COAL INDIA ESTIMATES PRODUCTION GROWTH BY OVERBURDEN REMOVAL - FINANCIAL EXPRESS
PSU miner Coal India (CIL) has now limited mining only to Overburden Removal (OBR) with falling demand of coal. The mining behemoth is now keeping ...
Friday, 05 June 20
U.S. SANCTIONS COMPLIANCE GUIDANCE RELEASED FOR THE GLOBAL MARITIME, ENERGY AND METALS SECTORS - AKIN GUMP
Key Points
On May 14, 2020, OFAC, the Department of State and the U.S. Coast Guard jointly released guidance for persons involved in the ma ...
Friday, 05 June 20
IN THE FIRST 5 MONTHS OF 2020 AUSTRALIA SHIPPED 6.8 MLN TONNES TO VIETNAM - BANCHERO COSTA
In the first 5 months of 2020, global seaborne coal trade declined by as much as -8% year-on-year, according to vessel tracking data from Ref ...
Thursday, 04 June 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
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- Malabar Cements Ltd - India
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Sical Logistics Limited - India
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Green Power PLC Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Bayan Resources Tbk. - Indonesia
- Tamil Nadu electricity Board
- Planning Commission, India
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Samtan Co., Ltd - South Korea
- Central Java Power - Indonesia
- Kepco SPC Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Agrawal Coal Company - India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Marubeni Corporation - India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Cement Manufacturers Association - India
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- India Bulls Power Limited - India
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Vedanta Resources Plc - India
- Toyota Tsusho Corporation, Japan
- Eastern Energy - Thailand
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Bhatia International Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- The University of Queensland
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Australian Coal Association
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
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