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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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Tuesday, 28 January 14
DRY BULK SHIP OWNERS RETREAT TO OLD 'HABITS', REFUSING TO DEMOLISH OLD VESSELS, THREATENING MARKET RECOVERY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
If one thing is clear as we reflect on the 2013 shipping markets, it's that ship owners took advantage of low prices, in order to acquire newer ton ...
Monday, 27 January 14
MERCATOR SINGAPORE REPORTS 52% INCREASE IN EBITDA FOR Q3 FY 2014 AS COMPARED TO PREVIOUS QUARTER
COALspot.com: Mercator Lines (Singapore) Limited, a leading Indian-owned international dry bulk shipping company that operates a fleet of fourteen d ...
Monday, 27 January 14
13TH CLEAN COAL FORUM 2014
COALspot.com: (Press Release) - Produced by CDMC Events, The 13th Clean Coal Forum 2014 will be held on June 12 &13 2014 in Beijing, China. We a ...
Monday, 27 January 14
Q3 & Q4 API 8 CFR SOUTH CHINA COAL SWAPS CONTINUE TO REMAIN WEAK
COALspot.com: API 8 CFR South China Coal swaps for average Q1 14 delivery lost 4.45 percent month on month and closed at US$ 79.05 per mt as on Frid ...
Monday, 27 January 14
Q3 2014 SUB-BIT INDONESIA COAL SWAP LOST GROUND, ENDS AT $60 PMT
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost 2.29% pmt month on month on Friday 24 January 2014. Th ...
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- McConnell Dowell - Australia
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- Marubeni Corporation - India
- Attock Cement Pakistan Limited
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- Merrill Lynch Commodities Europe
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- Coalindo Energy - Indonesia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
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- Commonwealth Bank - Australia
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- Essar Steel Hazira Ltd - India
- The University of Queensland
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- Star Paper Mills Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
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- Aboitiz Power Corporation - Philippines
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
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- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
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- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
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- Bhushan Steel Limited - India
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- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
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- Interocean Group of Companies - India
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
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- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Malabar Cements Ltd - India
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Indian Oil Corporation Limited
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