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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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Thursday, 20 February 14
SUPRAMAX: IN ASIA IS IMPROVING SIGNIFICANTLY AND TURNED FROM APS TO DOP MARKET
Handy
The activity is back in the market after Chinese holidays. Supramax in Asia is improving significantly and turned from APS to DOP market. We ...
Wednesday, 19 February 14
NEWCASTLE PORT SHIPPED 30% MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 17 February 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled ...
Tuesday, 18 February 14
PERUVIAN HIGH COMMISSIONER FOR MINING AFFAIRS WILL BE KEY NOTE SPEAKER AT THE COLOMBIAN COAL CONFERENCE 2014
Press Release: The High Commissioner for Mining Affairs in the Presidency of the Peruvian Council of Ministers, General (R) Daniel Urresti Elera, ha ...
Monday, 17 February 14
US COAL PRODUCTION IN 2013 FELL TO ITS LOWEST LEVEL IN 20 YEARS
COALspot.com: U.S coal production for 2013 totaled an estimated 996 million short tons (MMst), 21 MMst (2%) lower than in 2012. It is the first time ...
Monday, 17 February 14
Q1 2015 COAL SWAPS CLOSED $ 2.21 HIGHER THAN Q2 2014 SWAPS
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 delivery lost 3.16 percent month on month and closed at US$ 76.12 per mt as o ...
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- Timah Investasi Mineral - Indoneisa
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- Minerals Council of Australia
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- Economic Council, Georgia
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- Interocean Group of Companies - India
- White Energy Company Limited
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- Aditya Birla Group - India
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- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- London Commodity Brokers - England
- Anglo American - United Kingdom
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- LBH Netherlands Bv - Netherlands
- Larsen & Toubro Limited - India
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- Therma Luzon, Inc, Philippines
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- Miang Besar Coal Terminal - Indonesia
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- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
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- Indika Energy - Indonesia
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
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- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
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- Indonesian Coal Mining Association
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- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- European Bulk Services B.V. - Netherlands
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
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- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Orica Australia Pty. Ltd.
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- Carbofer General Trading SA - India
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- Grasim Industreis Ltd - India
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
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- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
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- Central Java Power - Indonesia
- Sarangani Energy Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
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- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
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- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Eastern Coal Council - USA
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- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
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