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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 February 14
INDONESIA PLAN TO CAP COAL OUTPUT AND HIKE ROYALTY; START MUSIC
COALspot.com: Energy and Mineral Resources Ministy of Indonesia is planning to increase the royalty for coal miners particularly for Mining Business ...
Friday, 21 February 14
THE WORLD'S SECOND LARGEST COAL MINER MINED 19.2 MMST OF COAL IN A WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, mined approximately 19.2 million short tons (mmst) of coal in a w ...
Friday, 21 February 14
DRY BULK MARKET SHOWS SIGNS OF LIFE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has slowly started to emerge from the downfall it's been since the start of the year, as rates have began to pick up over the c ...
Friday, 21 February 14
INDONESIA COAL OUTPUT CAP TO HURT MINERS RELIANT ON VOLUME GROWTH, FITCH SAYS
Fitch Ratings says that the credit profiles of mining sub-contractors and miners highly reliant on increasing volumes to support high debt servicing w ...
Thursday, 20 February 14
LENGTHY DELAYS TO PANAMA CANAL EXPANSION POSE GLOBAL TRADE RISKS; US COAL PRODUCERS TO GREATLY BENEFIT ONCE COMPLETE, SAYS WOOD MACKENZIE
Wood Mackenzie expects the recent cost overrun disputes around the Panama Canal expansion to be resolved with limited disruption due to the signific ...
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- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Interocean Group of Companies - India
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Baramulti Group, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Intertek Mineral Services - Indonesia
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Pendopo Energi Batubara - Indonesia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Central Java Power - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Edison Trading Spa - Italy
- Planning Commission, India
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Ind-Barath Power Infra Limited - India
- MS Steel International - UAE
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- The University of Queensland
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Romanian Commodities Exchange
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