Japanese quake to affect Asia-Pacific coal producers in the short term
23 Mar 2011
Thermal coal producers in Asia Pacific are likely to feel some short-term financial impact from Japan's recent earthquake and tsunami.
According to Standard & Poor's Ratings Services. Producers may find it difficult to deliver contracted coal to Japan, and prices will probably fall in the region due to oversupply.
The situation, however , could stabilise within a few months as demand and prices for thermal coal pick up.
"For the next three to four months, thermal coal exporters can expect their sales volumes to Japan to drop 10 per cent to 15 per cent. But this will be only a temporary decline," says Standard & Poor's credit analyst Suzanne Smith. "Despite a short-term negative impact on coal producers, the earthquake isn't a significant negative credit factor."
The earthquake in northeastern Japan crippled about 10 per cent of the country's electricity generation capacity, particularly for nuclear and thermal power.
Some of the damage may be beyond repair. Some thermal power plants of Tokyo Electric Power Co. Inc and Tohoku Electric Power Co Inc were badly hit.
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