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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, 12 May 21
MARKET INSIGHT - INTERMODAL
Tanker S&P is finally back!
For an extended period, Dry bulk & Wet market rates have been diverging, with the SnP deals on each sect ...
Monday, 10 May 21
PAKISTAN: COAL GASIFICATION AND LIQUEFACTION HARMFUL TO ECONOMY - IEEFA
There is no second life for coal
Pakistan’s intention to use coal for power production through gasification and liquefaction technologie ...
Sunday, 09 May 21
HERE'S WHY INVESTORS ARE POURING MONEY INTO COAL, DESPITE ITS BLEAK FUTURE - FORBES
Coal stocks have surged this year – along with the wider energy sector – but experts warn these are likely short-term gains for an indu ...
Sunday, 09 May 21
MAYBANK TO STOP COAL FINANCING - BERNAMA
Malayan Banking Bhd (Maybank) will stop financing new coal activities as part of its sustainable agenda.
Currently, coal financing m ...
Saturday, 08 May 21
LNG-TO-POWER INVESTORS IN THE PHILIPPINES RISK EXPOSURE TO $14 BILLION IN STRANDED ASSETS - IEEFA
High regulatory and financial uncertainty in the Philippines market
The race to develop liquified natural gas (LNG) facilities in th ...
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- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Bahari Cakrawala Sebuku - Indonesia
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- New Zealand Coal & Carbon
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Eastern Energy - Thailand
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Kepco SPC Power Corporation, Philippines
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Bhushan Steel Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Xindia Steels Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Singapore Mercantile Exchange
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- SMC Global Power, Philippines
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Indian Oil Corporation Limited
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Ministry of Mines - Canada
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- The Treasury - Australian Government
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Coalindo Energy - Indonesia
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Africa Commodities Group - South Africa
- Cigading International Bulk Terminal - Indonesia
- Chamber of Mines of South Africa
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Videocon Industries ltd - India
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