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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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Friday, 10 July 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 10 July 20
GLOBAL SHIPPING EARNINGS FORECAST CUT AS SUPPLY SET TO OUTSTRIP DEMAND - MOODY'S
EBITDA forecast worsens, keeping outlook negative. We now expect the aggregate EBITDA of rated shipping companies to fall by around 16%-18% in 2020 ...
Wednesday, 08 July 20
MARKET INSIGHT - INTERMODAL
During the previous month, the dry bulk market witnessed an impressive increase in the BDI index that has reached 1800 points from 500 with a clear ...
Tuesday, 07 July 20
COAL INDIA WORKERS STRIKE CUTS OUTPUT BY 56%: OFFICIAL - REUTERS
A strike at Coal India Ltd cut production by 56% in the three days ending July 4 as workers oppose opening up coal mining to the private sector, a ...
Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
Wind, solar, electric vehicles, stationary storage and transmission are all central to achieving the Paris Agreement decarbonisation goals.
&nb ...
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- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Tata Chemicals Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Sakthi Sugars Limited - India
- Bayan Resources Tbk. - Indonesia
- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Thiess Contractors Indonesia
- Grasim Industreis Ltd - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Ceylon Electricity Board - Sri Lanka
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Madhucon Powers Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Thai Mozambique Logistica
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Central Java Power - Indonesia
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Aditya Birla Group - India
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- Meralco Power Generation, Philippines
- Renaissance Capital - South Africa
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
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