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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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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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Showing 51 to 55 news of total 6871 |
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- Ambuja Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Minerals Council of Australia
- Bharathi Cement Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Intertek Mineral Services - Indonesia
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Jaiprakash Power Ventures ltd
- Carbofer General Trading SA - India
- Riau Bara Harum - Indonesia
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- International Coal Ventures Pvt Ltd - India
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Oldendorff Carriers - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- IHS Mccloskey Coal Group - USA
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Thai Mozambique Logistica
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Planning Commission, India
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Orica Australia Pty. Ltd.
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Malabar Cements Ltd - India
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
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