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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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Tuesday, 02 June 20
THE HISTORIC DECLINE OF US COAL - WOOD MACKENZIE
The first commercial power plant in the US was Thomas Edison’s coal-fired Pearl Street station in lower Manhattan, which started operating in ...
Tuesday, 02 June 20
COAL INDIA'S MAY SALES DRIVEN SHARPLY LOWER BY SLUMP IN POWER DEMAND - REUTER
Coal India’s sales fell 23.3% in May as utilities refrained from purchases amid record stockpiles and tepid demand because of a nationwide lo ...
Tuesday, 02 June 20
TUAH TURANGGA AGUNG RECORDED 4.54 MILLION TONS OF COAL SALES IN THE FIRST FOUR MONTHS OF 2020
PT United Tractors Tbk through its subsidiary, PT Tuah Turangga Agung recorded 4.54 million tons of coal sales in the first four months of 2020, up ...
Tuesday, 02 June 20
SOURING SINO-AUSTRALIA TRADE RELATIONS - BALTIC EXCHANGE
Cooling relations between the commodity powerhouses of China and Australia may point to trade troubles ahead when the world emerges from the Covid- ...
Tuesday, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
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- Indian Energy Exchange, India
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Miang Besar Coal Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhushan Steel Limited - India
- GAC Shipping (India) Pvt Ltd
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Siam City Cement - Thailand
- European Bulk Services B.V. - Netherlands
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- White Energy Company Limited
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Baramulti Group, Indonesia
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- ASAPP Information Group - India
- Planning Commission, India
- PowerSource Philippines DevCo
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- PTC India Limited - India
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- Minerals Council of Australia
- GVK Power & Infra Limited - India
- Wood Mackenzie - Singapore
- International Coal Ventures Pvt Ltd - India
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
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