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Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
 Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited direct near-term credit impact for energy-sector issuers rated by Fitch Ratings, according to the agency. However, the caps highlight that energy companies face mounting political risks that could influence investor perceptions of the sector and capex plans over the long term.
The caps have been proposed for 12 months, but even if they are extended, the direct impact should generally be limited if prices for coal and gas fall over the coming years, in line with Fitch’s base-case assumptions.
The near-term impact on Australian thermal coal miners’ financial profiles will be further mitigated, as typically around 80% of the thermal coal produced in the country is exported, and therefore is not subject to the cap.
The natural gas sector will be more exposed, as domestic demand accounts for a larger share of supply. Santos (BBB/Stable) and Woodside Energy Group (BBB+/Stable) are large suppliers of gas to the domestic market. Such sales account for more than 40% of Santos’s gas production, but we estimate that only around 15% of total production goes to the east coast markets that are exposed to the price cap.
Woodside’s domestic gas sales, including pipeline gas from the NWS Project, Pluto and Wheatstone, account for less than 6% of its gas production, with the rest exported as LNG. For both companies, most gas is already produced under long-term contracts, which will be unaffected by the caps, limiting the near-term impact. The proportion of output affected could nonetheless rise over time if the caps are extended beyond 12 months.
The prevalence of long-term supply contracts will also reduce the impact of the caps for most domestic electricity and gas retailers, including Origin Energy (BBB/Stable). If global energy prices remain high, it is possible that the caps could offer a competitive advantage to some retailers that rely more on short-term supply contracts. That said, the superior sourcing ability and flexibility in contracts should limit downside risks for large retailers. For electricity sales, the highest-cost power generator generally determines the wholesale energy market price, and we anticipate a neutral to marginally positive financial effect for entities like Origin that have flexibility in their generation portfolio.
The price caps will add to a perception that Australia’s mining sector faces mounting political risk, even though we do not believe they will have a major impact on Fitch-rated issuers in the near term. For example, the government has announced plans to implement a new system to protect sites important to Australia’s indigenous peoples. Firms in the sector, as in other parts of the world, also face political risks associated with official efforts to promote the transition to renewable energy sources.
Mounting political risk may influence investors’ perceptions of the sector, and therefore the terms on which companies are able to access finance. This could also have ramifications for M&A plans or long-term capex strategies. Nonetheless, it is likely to take time to assess the impact, which may also be offset by other market developments.
Australia’s parliament on 16 December passed legislation empowering the government to regulate gas prices, alongside an AUD1.5 billion relief package for firms and households. It remains unclear how the relief package will affect power and gas market dynamics, but we expect its impact to be temporary. The authorities plan to cap domestic gas prices at AUD12 per gigajoule. Domestic thermal coal sales prices in New South Wales and Queensland will also be capped at AUD125 per tonne.
Source: Fitch Ratings
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Wednesday, 12 June 24
CHINA ACCOUNTS FOR 16.3% OF AUSTRALIA'S COAL EXPORTS, FOLLOWED BY INDIA 14.4% - BANCHERO COSTA
Global coal trade has really picked up pace in recent months, and is now fully back to pre-Covid levels says Banchero Costa in its latest report.
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Wednesday, 12 June 24
LNG NEWBUILDING VALUES AT RECORD HIGH: 78 NEWBUILD ORDERS PLACED IN 2024, DOUBLING 2023 - VESON NAUTICAL
The number of LNG newbuilding orders have more than doubled from the same period last year where 34 orders were placed, compared to 78 in the first ...
Monday, 10 June 24
CHINA'S MAY COAL IMPORTS RISE 11% ON LOWER DOMESTIC OUTPUT - REUTERS
China’s imports of coal rose 11% in May from a year earlier, customs data and Reuters records showed on Friday, as lower domestic output this ...
Tuesday, 04 June 24
HOW DO WESTERN SANCTIONS ON RUSSIA IMPACT THE GLOBAL METALS, MINING AND COAL MARKETS - WOOD MACKENZIE
The geopolitical landscape for Russia, as a major supplier of various commodities, has undergone a dramatic transformation since the invasion of Uk ...
Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
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Showing 21 to 25 news of total 6871 |
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- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- Merrill Lynch Commodities Europe
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Renaissance Capital - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indian Energy Exchange, India
- Toyota Tsusho Corporation, Japan
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Indika Energy - Indonesia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Parliament of New Zealand
- Wood Mackenzie - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- Latin American Coal - Colombia
- TeaM Sual Corporation - Philippines
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