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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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- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- South Luzon Thermal Energy Corporation
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Jorong Barutama Greston.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Petrochimia International Co. Ltd.- Taiwan
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Thai Mozambique Logistica
- Baramulti Group, Indonesia
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Jindal Steel & Power Ltd - India
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Planning Commission, India
- The Treasury - Australian Government
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Coalindo Energy - Indonesia
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Therma Luzon, Inc, Philippines
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