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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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Tuesday, 18 March 14
SECOND QUARTER SUB-BIT FOB INDONESIA COAL SWAP LOST 3.27% IN A MONTH
COALspot.com – Indonesia, the world’s largest exporter of the thermal coal's swaps for delivery April - June 2014 gained this pa ...
Tuesday, 18 March 14
NEWCASTLE COAL EXPORT VOLUME FALLS 26.23% WEEK ON WEEK
COALspot.com: In the week ended 17 March 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2 ...
Monday, 17 March 14
API 8 CFR SOUTH CHINA COAL SWAPS FOR AVERAGE Q2 14 DELIVERIES LOST 2.59% M-O-M
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 2.59 percent month on month and closed at US$ 74.15 per mt as o ...
Sunday, 16 March 14
BDI DOWN ON LOW CAPESIZE ACTIVITY
COALspot.com: The freight market was slightly soft this week with BDI down by 4.28 pct week on week. The BDI closed at 1,477 points and the cape ...
Friday, 14 March 14
DRY BULK MARKET ENTERS RECOVERY MODE, ON INCREASED CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has entered and sustained higher ground as of this week, on the back on increased Capesize demand. Although the situation in ...
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- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Maheswari Brothers Coal Limited - India
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
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- Kepco SPC Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- SMG Consultants - Indonesia
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- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
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- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- Planning Commission, India
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- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- The University of Queensland
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Australian Coal Association
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- Thai Mozambique Logistica
- Bahari Cakrawala Sebuku - Indonesia
- Bayan Resources Tbk. - Indonesia
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Bukit Asam (Persero) Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Carbofer General Trading SA - India
- The Treasury - Australian Government
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
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