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Tuesday, 24 August 21
COAL PRICE RALLY TO PRESSURE CHINESE POWER GENCOS’ MARGINS FITCH RATINGS
Fitch RatingsFitch Ratings expects the pressure on Chinese power generation companies’ (gencos) profit from the recent coal price surge to weaken their credit metrics in 2021. However, the magnitude may vary as they have different risk exposure to coal-price fluctuations from factors such as fuel mix, business and geographical diversification, degree of integration and coal procurement strategy.
 
The Chinese benchmark Qinhuangdao 5,500 kcal/kg coal price surged 66% yoy to CNY942/tonne by end-July 2021. Power gencos with higher capacity contribution from coal-fired power and less integration into the coal-mining business are more vulnerable to the coal price rally.
 
However, their coal procurement strategies may partly mitigate the adverse impact. Some power gencos maintain a high share of procurement via long-term contracts, which, to some extent, can mitigate their lack of a natural hedge from having an upstream coal-mining business. Power gencos in coastal regions also use more imported coal, which is generally cheaper than domestic coal, while power gencos with assets in proximity to low-cost inland coal mines benefit from lower coal price volatility and transport costs.
 
Fitch expects rated Chinese power gencos’ leverage to rise in 2021 due to lower operating cash flow, reflecting the coal-price-driven profit decline, and higher capex to fund renewable investments. We expect most of the rated gencos’ Issuer Default Ratings (IDR) to remain intact due to their status as government-related entities or subsidiaries with IDRs linked directly or indirectly to the creditworthiness of their local governments under a top-down approach based on our Government-Related Entities Rating Criteria. However, standalone credit profile headroom for some entities may be reduced due to the elevated leverage.


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Friday, 20 August 21
ARE WE LOOKING AT THE NEXT DRY BULK SUPER CYCLE? IS IT EVEN A CYCLE? - BIMCO
Throughout the first half of the year, talk of a new dry bulk super cycle has been on many lips as commodity prices have soared to multi-year highs ...


Friday, 20 August 21
BIMCO'S SHIPPING NUMBER OF THE WEEK: CHINESE IRON ORE IMPORTS FALL TO 14-MONTH LOW IN JULY - PETER SAND
Chinese iron ore imports fell to 88.5 million tonnes in July, the lowest level since May 2020. The fall in July means that accumulated imports are ...


Friday, 20 August 21
SOARING DEMAND FOR THE WORLD’S LEAST-LIKED COMMODITY SEES THERMAL COAL PRICES JUMP 106% THIS YEAR - CNBC
Soaring electricity demand, infrastructure woes and a surge in global gas prices have triggered an extraordinary rally for the world’s least ...


Friday, 20 August 21
CHINA’S IRON ORE IMPORTS CONTRACTED YEAR-ON-YEAR BY 2% IN 2018 AND GREW YEAR-ON-YEAR BY ONLY 1% IN 2019 - COMMODORE RESEARCH
Examining the last ten years of China’s crude steel output and  iron ore imports shows that China’s iron ore imports have stayed r ...


Friday, 13 August 21
INDONESIA’S COAL EXPORTS TO JAPAN DECLINED BY -26.3% YOY TO 11.9 MLN TONNES IN THE FIRST 7 MONTHS OF 2021; STILL THE SECOND LARGEST SOURCE FOR JAPAN’S COAL IMPORTS IS INDONESIA - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. Total global loadings in the 12 months of 2020 were down -12.7% year-on-yea ...


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