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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, 07 April 21
MARKET INSIGHT - INTERMODAL
Following the end of the catholic easter, during which the majority of shipping market participants were on holidays, it is interesting to note a f ...
Wednesday, 07 April 21
COAL USED TO GENERATE ELECTRIC POWER IN U.S. WILL INCREASE BY 13 PERCENT TO 495 MMST IN 2021 - EIA
EIA expects U.S. coal production to total 585 MMst in 2021, 46 MMst (9%) more than in 2020. In 2022, EIA expects coal production to grow by an addi ...
Wednesday, 31 March 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.12 PCT - XINHUA
China Taiyuan coal transaction price index stood at 139.03 points Monday, up 0.12 percent week on week.
The index, released by China ...
Wednesday, 31 March 21
MARKET INSIGHT - INTERMODAL
Over the past week, the biggest story has been the blockage of the Suez Canal, as a result of the grounding of the container ship Ever Given. At th ...
Monday, 29 March 21
MOODY'S: OUTLOOK FOR GLOBAL METALS AND MINING INDUSTRY TURNS POSITIVE ON HIGHER EBITDA IN PANDEMIC'S WAKE
- Demand for steel, iron ore and copper will rise, while aluminum, nickel and zinc will remain in surplus
- EBITDA is expected to ...
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- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Renaissance Capital - South Africa
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Indian Oil Corporation Limited
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Romanian Commodities Exchange
- Simpson Spence & Young - Indonesia
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
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