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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, 12 January 14
THE FREIGHT MARKET CONTINUE TO REMAIN WEAK NEXT WEEK - SOLYM CARRIERS
Wish You A very Happy New Year
COALspot.com: The market has dropped quite a lot as expected due to holidays and probably also the effect of ban o ...
Friday, 10 January 14
DECISION ON ORE EXPORT BAN WILL BE MADE TOMORROW: INDUSTRY MINISTER, JG SAYS
Industry Minister M.S. Hidayat dismissed reports on Thursday that the government had made a decision on the matter. “We will only make a decis ...
Friday, 10 January 14
US COAL PRODUCTION UP 5.8% ON WEEK IN WEEK ENDED SATURDAY 4 JANUARY
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Thursday, 09 January 14
THE INDONESIAN GOVERNMENT EASES ORE EXPORT BAN
COALspot.com: The Indonesian government has finally agreed to ease the ore-export ban just a few days before the Sunday deadline amid protests from ...
Thursday, 09 January 14
CAPESIZE: WEST AUSTRALIA FREIGHT IS NOW DOWN IN THE $8S AND STILL DROPPING - FEARNLEYS
Handy
In the Atlantic we see rates sliding slowly for the start of 2014. Several players cvrd over the holidays and the rate decline was som ...
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- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Economic Council, Georgia
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Edison Trading Spa - Italy
- Australian Coal Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- VISA Power Limited - India
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- PTC India Limited - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Kartika Selabumi Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Antam Resourcindo - Indonesia
- Gujarat Sidhee Cement - India
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Latin American Coal - Colombia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Commonwealth Bank - Australia
- Planning Commission, India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Indonesian Coal Mining Association
- Orica Mining Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Posco Energy - South Korea
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
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