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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, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Chamber of Mines of South Africa
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Ambuja Cements Ltd - India
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Power Finance Corporation Ltd., India
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Jorong Barutama Greston.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Posco Energy - South Korea
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Australian Coal Association
- Indian Energy Exchange, India
- Sakthi Sugars Limited - India
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- IHS Mccloskey Coal Group - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Merrill Lynch Commodities Europe
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Interocean Group of Companies - India
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Antam Resourcindo - Indonesia
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- Meenaskhi Energy Private Limited - India
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Sarangani Energy Corporation, Philippines
- MS Steel International - UAE
- Ministry of Mines - Canada
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Madhucon Powers Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Rio Tinto Coal - Australia
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
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