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Thursday, 23 September 21
RECORD-HIGH GAS PRICES AFFECT MANY EUROPEAN CORPORATE SECTORS - FITCH RATINGS
 Record-high natural gas prices are putting pressure on supply chains of many European corporate sectors, including non-integrated energy suppliers, fertiliser producers and consumer goods companies, Fitch Ratings says. Smaller companies in these industries are under the most pressure, while larger and more diversified issuers rated by Fitch are better positioned to mitigate the impact. Gas prices could remain high until the end of the winter heating season, given low levels of natural gas in European storage facilities. However, we expect prices to moderate once seasonal demand reduces.
High gas prices and working capital fluctuations have already caused several non-integrated UK gas suppliers (not rated by Fitch) to ask for state support in fulfilling their supply obligations to customers.
The Spanish government has introduced a levy on low-carbon power producers to support smaller suppliers.
Supply is typically a small part of larger Fitch-rated integrated utilities in Europe, which are able to pass costs on to most customer groups, or hedge. Although we expect higher gas prices to increase regulatory risks, the rated utilities’ diversification by jurisdiction and business line, including electricity production and distribution networks, cushions the impact. The unfolding situation in the European gas market may further accelerate the energy transition in the utility sector towards renewables.
Fertiliser producers have been severely affected by rising gas prices. Gas is a key input in ammonia production, which is further used in urea and DAP production. Several ammonia plants in Europe have cut their output or have temporarily shut down operations. Larger Fitch-rated fertiliser producers with a global presence are able to continue production in other regions or source ammonia from third parties, limiting the impact. Producers may also seek to increase fertiliser prices to pass costs onto consumers.
Agriculture and food producers are affected by challenges in the fertiliser sector. Agribusinesses may face shortages in fertiliser supplies and increased prices, most likely increasing their costs in the next season’s harvest. However, meat processors and carbonated drinks manufacturers, particularly in the UK, already face disruptions due to CO2 shortages, which is a by-product of ammonia manufacturing and is used in meat and fizzy drinks production. Geographically diversified food and beverages producers are better positioned to mitigate such shortages.
The record-high prices in Europe are driven by increased demand (due to the wider economic recovery and weather-related factors), competition with Asia for LNG, and a limited supply response from Gazprom, Europe’s largest supplier, providing about a third of Europe’s gas. Prices have also risen due to market fears of a gas deficit during the winter heating season due to low European storage utilisation compared to previous years.
Utilisation at Gazprom-linked storage facilities (around 10% of European capacity) is particularly low, affecting average utilisation rates in Austria, Germany and the Netherlands. Furthermore, unlike September in recent years, Gazprom has not offered any meaningful volumes for delivery this or next year via its electronic sales platform (a sales channel for short-term gas deliveries, used in addition to sales under long-term contracts). Gazprom’s total exports should increase in 2021 but this is unlikely to be sufficient to re-balance the market. Starting the new Nord Stream 2 pipeline, which is facing difficulties in obtaining necessary approvals from regulators in Europe, may affect the availability of additional gas volumes.
We have recently increased our short-term gas price assumptions. However, we expect a normalisation of demand and potential additional supplies to result in a return to mid-cycle pricing from 2023.
Source: Fitch Ratings
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Wednesday, 28 July 21
MARKET INSIGHT - INTERMODAL
Assessing the ship repair sector during this first half of the year, we continue to come across surprises and new restrictions which are trembling ...
Saturday, 24 July 21
UNDERSTANDING INDIA'S LATEST PEAK POWER DEMAND RECORD - IEEFA
Ramping up solar will be crucial as peak power demand hits during the day
At around noon on 7 July 2021, India’s instantaneous ...
Wednesday, 21 July 21
MARKET INSIGHT - INTERMODAL
Dry Buk Sales and Purchase activity has heated up during 2021, reaching record high levels during the first half of the year. The increased interes ...
Monday, 19 July 21
CHINA'S COAL OUTPUT UP 6.4 PCT IN H1 - XINHUA
China’s raw coal output climbed 6.4 percent year on year to 1.95 billion tonnes in the first six months of the year, official data showed.
...
Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
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- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Kobexindo Tractors - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Essar Steel Hazira Ltd - India
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Interocean Group of Companies - India
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Heidelberg Cement - Germany
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Miang Besar Coal Terminal - Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Altura Mining Limited, Indonesia
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Edison Trading Spa - Italy
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Electricity Authority, New Zealand
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Manunggal Multi Energi - Indonesia
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Vedanta Resources Plc - India
- Aditya Birla Group - India
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Rashtriya Ispat Nigam Limited - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
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