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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, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
Thursday, 22 December 22
CHINA TIGHTENS VERIFICATION OF SHIPS’ ENERGY CONSUMPTION DATA - GARD
From 22 December 2022, ships trading to Chinese ports must record their energy consumption data in accordance with the requirements of their Ship E ...
Thursday, 22 December 22
AN OVERVIEW OF THE LNG MARKET - VESSELSVALUE
LNG values have continued to strengthen, spurred by skyrocketing earnings that have surpassed last year’s record breaking peaks. In November, ...
Thursday, 22 December 22
COKING COAL SLUMPS AS TALKS ON AUSTRALIA-CHINA TRADE RIFT LOOM - REUTERS
Chinese coking coal futures dropped more than 3 per cent on Tuesday (Dec 20), extending losses, as supply of the steelmaking input might increase i ...
Monday, 19 December 22
ENERGY CRISIS FUELS COAL COMEBACK IN GERMANY - REUTERS
Coal has made a comeback in Germany this year, as Europe’s largest economy turns to the dirty fuel to power it through an energy crisis.
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- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- PTC India Limited - India
- VISA Power Limited - India
- ICICI Bank Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- PowerSource Philippines DevCo
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Mintek Dendrill Indonesia
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- Renaissance Capital - South Africa
- Madhucon Powers Ltd - India
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Pendopo Energi Batubara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Indika Energy - Indonesia
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Formosa Plastics Group - Taiwan
- Merrill Lynch Commodities Europe
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Coal Council - USA
- Goldman Sachs - Singapore
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