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