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Friday, 10 July 20
SLOW RECOVERY IN TANKER RATES TO WEIGH ON BUANA LINTAS LAUTAN - FITCH RATINGS
 Fitch Ratings believes that international tanker rates are likely improve after their sharp fall since May 2020, albeit at a slow pace. The weakness in rates may weigh on the financial profile of PT Buana Lintas Lautan Tbk (BULL, B+/Negative), which has around 15% of its fleet capacity earning revenue based on international spot rates.
The Baltic Dirty Tanker Index, which is made up from 12 Baltic international routes and mainly for crude oil shipping, has declined to below 500 points, from an average of 1,200 in March-April 2020, and is at its lowest since 2009. The index averaged 855 points in 2019 and around 770 points since 2009. Similarly, the Baltic Clean Tanker Index for refined fuel shipping has fallen to below 400 points from an average of around 1,305 points in April 2020.
The sharp fall in rates follows lower demand for global oil transportation with the OPEC+ alliance announcing in April 2020 an agreement to cut output by 9.7 million barrels per day (mbpd), or 10% of global output, from May 1. The group agreed in June to extend the production cut by one month through the end of July. The cut in output also resulted in a sharp rally in crude oil prices, with Brent price increasing to over USD40 per barrel (bbl) from around USD20/bbl near mid-April. Higher oil prices reduced the demand for floating storage and such tankers were freed, increasing spare capacity and pressuring rates.
Tanker demand has declined sharply since March-April, when Saudi Arabia increased its oil output ahead of the OPEC+ deal to cut production. The effect of increased oil output on tanker rates was compounded by the sharp fall in oil prices, which caused the futures curve to be in contango and incentivised oil storage on land and in tankers.
Demand for tankers is likely to improve from August with a reduction in the OPEC+ cuts to 7.7mbpd until the end of the 2020 and further to 5.8mbpd from January 2021. However, the output cut will continue weighing on tanker rates and improvement in rates is likely to be a gradual process.
Indonesian tanker operators PT Soechi Lines Tbk (B/Stable) and BULL benefit from largely stable rates in the domestic market, which is protected from foreign competition by cabotage laws and dominated by state-owned oil major PT Pertamina (Persero) (BBB/Stable) which is the main revenue driver.
However, BULL’s exposure to international rate volatility has increased this year. BULL had 24 of its 25 ships, or 93% of its fleet capacity, under standard time-charter contracts as of end-2019 while one tanker was part of a pool of ships managed by a pool operator and earned revenue based on international spot rates. The share of BULL’s fleet capacity managed by the pool operator has increased to 14% by end-2Q20 with three out of 33 ships being part of the pool. Additionally, BULL has two ships constituting 10% of its capacity under time-charter contracts with a base rate and upside if international spot rates are higher.
The company said it is seeking to switch the fleet under the pool operator to short-term time charter contracts of three to six months from September 2020 to limit the impact of the fall in tanker rates. Nonetheless, the Negative Outlook on BULL’s rating reflects risks to its financial profile from weak international rates, apart from sustained spending on fleet expansion. We estimate FFO gross leverage to increase to 3.8x in 2021, from 2.9x in 2020 (2019: 4.3x), due to lower international rates and EBITDA. We also assume BULL acquires five more ships for USD100 million in 2021.
Source: Fitch Ratings
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Wednesday, 15 July 20
CHINA'S JUNE COAL IMPORTS FALL 6.7% Y/Y ON PORT CURBS - REUTERS
China’s coal imports dropped 6.7% in June from the same period last year, as stringent import restrictions at ports impeded purchases by trad ...
Wednesday, 15 July 20
MARKET INSIGHT - INTERMODAL
The Covid-19 virus spread around the world has obviously impacted the global oil demand while the situation remains fluid. The overall constraint ...
Tuesday, 14 July 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.75 PCT - XINHUA
China Taiyuan coal transaction price index stood at 126.01 points Monday, up 0.75 percent week on week.
The index, released by China ...
Tuesday, 14 July 20
TURKEY - A CASE OF UNDECLARED BUNKER - GARD
KNOWLEDGE TO ELEVATE
Undeclared/excess bunkers can be considered a criminal act by Turkish customs officials with the ship's crew being ac ...
Monday, 13 July 20
PANAMAX: A TUMULTUOUS WEEK IN THE PANAMAX MARKET ENSURED ALL MARKETS GAINED VALUE ON THE WEEK - BALTIC BRIEFING
Capesize
This week witnessed the dreaded correction in the Capesize market, with the time charter average shedding almost 18 per cent to close ...
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- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Essar Steel Hazira Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- Australian Commodity Traders Exchange
- Lanco Infratech Ltd - India
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Price Waterhouse Coopers - Russia
- Maheswari Brothers Coal Limited - India
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Star Paper Mills Limited - India
- Chettinad Cement Corporation Ltd - India
- The University of Queensland
- Goldman Sachs - Singapore
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Attock Cement Pakistan Limited
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Electricity Generating Authority of Thailand
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Indian Energy Exchange, India
- Planning Commission, India
- PowerSource Philippines DevCo
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
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