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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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Monday, 10 March 14
THE FREIGHT MARKET WAS QUITE FIRM THIS PAST WEEK
COALspot.com: The freight market was quite firm this past week with BDI sharply increased by 22.65 pct week on week and closed at 1543 points, while ...
Saturday, 08 March 14
LETTERS OF INDEMNITY - SKULD
KNOWLEDGE TO ELEVATE
In today's trading market, owners are frequently requested to accept a letter of indemnity (LOI) in exchange for complying ...
Friday, 07 March 14
DRY BULK MARKET TO BENEFIT FROM CHINA'S GDP GROWTH TARGET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With the dry bulk market freight rates finally making waves, China's aim of 7.5% GDP growth for 2014 mean once again positive news for the shipping ...
Friday, 07 March 14
RBCT, WORLD'S LARGEST COAL EXPORTING TERMINAL SHIPPED 1.78% LESS COAL MONTH ON MONTH
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest export coal terminal in the world, shipped 4.487 million tons of ...
Friday, 07 March 14
INDONESIA SHIPPED 7% LESS COAL IN JANUARY 2014 COMPARED TO ITS DECEMBER EXPORTS
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $1.8* billion ...
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- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- New Zealand Coal & Carbon
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- TeaM Sual Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Bayan Resources Tbk. - Indonesia
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- White Energy Company Limited
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bhushan Steel Limited - India
- Therma Luzon, Inc, Philippines
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Tamil Nadu electricity Board
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- CIMB Investment Bank - Malaysia
- Maheswari Brothers Coal Limited - India
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- CNBM International Corporation - China
- Planning Commission, India
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Independent Power Producers Association of India
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Eastern Energy - Thailand
- PTC India Limited - India
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Meralco Power Generation, Philippines
- Australian Coal Association
- Bangladesh Power Developement Board
- Sakthi Sugars Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
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