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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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Sunday, 16 February 14
SUPRAMAX : THE FAR EAST/SE ASIA CHARTER RATES FIRMED UP
COALspot.com: The freight market had a mixed reaction this week with BDI increased by 1.37 pct and closing at 1106 points on Valentine day. The cape ...
Friday, 14 February 14
US COAL PRODUCTION STILL SLIPPING
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.9 million short tons (mmst) of coal in ...
Thursday, 13 February 14
PANAMAX : NOT ENOUGH REQUIREMENTS TO KEEP THE ATLANTIC MARKET FLOATING - FEARNLEYS AS
Handy
After the Chinese holidays the week started on a positive note. Owners are talking higher rates but chrtrs are still somehow reluctant to mov ...
Thursday, 13 February 14
DRY BULK MARKET FACES BETTER PROSPECTS ON THE BACK OF IMPROVING DEMAND AND SUPPLY BALANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has started off the New Year on the "left foot", with the strong finish of 2013 proving to be unsustainable, on the ba ...
Wednesday, 12 February 14
NEW BUILDING ORDERS REACHING NEW POST-CRISIS HEIGHTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners are looking to take advantage of the last few attractive deals in the new building market, before prices start climbing to new highs and ...
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- Indo Tambangraya Megah - Indonesia
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Deloitte Consulting - India
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
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- Gujarat Mineral Development Corp Ltd - India
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- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Australian Coal Association
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- Thiess Contractors Indonesia
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
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- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Uttam Galva Steels Limited - India
- Rio Tinto Coal - Australia
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Global Business Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Manunggal Multi Energi - Indonesia
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Wood Mackenzie - Singapore
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Borneo Indobara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
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