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Saturday, 22 February 14
POTEN RAISES THE QUESTION OF ACCURACY IN CALCULATING TANKER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the tanker market has grown in complexity over the course of the past few years, the question of whether the traditional methods of assessing rates is still valid. In a recent report, Poten & Partners noted that "the market landscape for crude oil and refined product trades has an inherent element of shifting sand, presenting an organization like the Baltic Exchange with certain challenges. The Baltic Exchange is a centuries-old institution that, among other services, oversees a collective of member shipbrokers who contribute daily freight rate assessments for the wet and dry bulk shipping markets. The freight rates that are collected by the Baltic Exchange are in turn used by both charterers and shipowners, as well as other market participants, as a reliable metric of freight pricing for internal and external financial calculations. Although the birth and death of trade lanes is a natural market evolution, such developments pose questions of relevancy to the Baltic Exchange’s data collection efforts. While the decision to discontinue a certain set of assessments due to perceived obsolescence is objectively simple, it could have broader implications for commercial market participants that have freight contracts dependent on these rates", Poten said.
According to the analyst, the Baltic Dirty Tanker Index. This index is currently comprised of 12 benchmark tanker routes, covering all trade routes and vessel sizes. The BDTI serves as an often cited reference of general health of the tanker market freight rate environment. The Baltic Exchange International Tanker Routes (BITR) are quoted on individual trades for specific cargo sizes for clean and dirty cargoes. For example, the tanker trade with the largest volume worldwide is often referred to as “TD3” or “Tanker Dirty” route number “3” – the voyage basis is from Ras Tanura, Saudi Arabia to Chiba, Japan for 265,000 metric tons of cargo".
In the report, Poten cited an announcement issued on February 5, 2014, which indicated that the Baltic Exchange was suspending their assessments of the routes “TC3_38” and “TD10D”, Aruba – New York for 38,000 metric tons of clean products and Aruba – New York for 50,000 metric tons of fuel oil, respectively. The removal of TD10D would leave the market without a Baltic Exchange instrument for quoting Panamax freight rates.
Poten noted that "in early 2012, Valero shut down their 235,000 bpd Aruba refinery, effectively rendering the voyage basis irrelevant. Historically, the Aruba refinery yielded significant volumes of fuel oil that were exported and often utilized as feedstock in Valero’s Paulsboro, N.J. refinery or for power generation on the US East Coast. The Aruba refinery eventually became structurally disadvantaged compared to US Gulf Coast refineries due to a higher operational cost base; it, like other Caribbean refineries, did not have access to cheap natural gas for power supply. Using reported spot market activity for Panamaxes loading in the Caribbean as a proxy for total market activity, trade volumes from the Caribbean to the US Atlantic Coast have become insignificant. Although still a relatively small market, fixture activity has increased for the Caribbean to US Gulf trade".
It added that "it stands to reason that the Baltic Exchange should continue to assess at least one dirty Panamax trade route. Contracts of Affreightment, or COAs, whereby shipowners and oil companies pre-arrange transportation volumes over a specified period of time, often incorporate some kind of discount to prevailing spot market rates. In exchange for a guaranteed volume of business from an oil company, a shipowner or pool will typically offer a discount to market rates. The Baltic Exchange rate assessments are often referenced in contract language accordingly. The same logic applies for time charters that involve profit sharing elements; shipowners and charterers agree how the profit share will be determined based on independent freight rate assessments.
In the case of TD10D, the Baltic Exchange might consider changing the voyage basis in order to prevent commerical disruption. Load ports for crude export in countries such as Venezuela, Colombia or Trinidad are viable options and the destination should, undoubtedly, be in the US Gulf. The question of what to do with the Aruba to New York (TC3) benchmark for clean products is more black and white. The sizeable increase in refined products exports from the US Gulf to the Caribbean and Latin American countries has displaced imports from the Caribbean. With strong refining economics in the US Gulf, it is difficult to see any reversal in this trend anytime soon", Poten concluded.
source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
Thursday, 20 March 14
CAPESIZE: WEST AUSTRALIA TO CHINA RATES HAVE CLIMBED BACK TOWARD USD 11 PMT - FEARNRESEARCH
Handy
From a slight improvement in the Atlantic to a more mixed picture this mid week. North Atlantic rounds showing softening signs whereas S ...
Wednesday, 19 March 14
INSTEAD OF DECIDING WHETHER THE GLASS IS HALF FULL OR HALF EMPTY, I AM CURRENTLY GLAD THERE IS WATER IN THE GLASS - EVA TZIMA
By Eva Tzima
Research Analyst
Intermodal Research & Valuations
Right when you think that you have all your facts straight, right wh ...
Wednesday, 19 March 14
EUROCOKE SUMMIT 2014
Press Release: ThyssenKrupp, Steel Institute VDEh, SSI and more headline Smithers Apex’s Eurocoke Summit
The leading coke, coal and s ...
Wednesday, 19 March 14
DRY BULK MARKET REBOUND LEADS TO MORE NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The steady rise of the dry bulk market, as evidenced by the return, yesterday, of the Baltic Dry Index above the 1,500-point mark (1,518), is fu ...
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- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Mercuria Energy - Indonesia
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- Krishnapatnam Port Company Ltd. - India
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Star Paper Mills Limited - India
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Intertek Mineral Services - Indonesia
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Mintek Dendrill Indonesia
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Asmin Koalindo Tuhup - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Economic Council, Georgia
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Straits Asia Resources Limited - Singapore
- Videocon Industries ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Kepco SPC Power Corporation, Philippines
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Cement Manufacturers Association - India
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Ministry of Mines - Canada
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Makarim & Taira - Indonesia
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Therma Luzon, Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- Wood Mackenzie - Singapore
- Ministry of Finance - Indonesia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- Australian Coal Association
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
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