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