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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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Monday, 06 July 20
INDONESIAN COAL PRICE REFERENCE IN FREE FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 06 July 20
SUPRAMAX: A 58,000-DWT FIXING DELIVERY VIETNAM TRIP VIA INDONESIA RE-DELIVERY WEST INDIA IN THE LOW $4,000S
Capesize
The Capesize market continues to go from strength to strength, as rates reach highs not seen since September last year. The rally is p ...
Thursday, 02 July 20
PRIVATE COAL MINING MAY SEE WEAK INVESTOR SENTIMENT: ICRA - LIVEMINT
The prospects of commercial coal mining in India may be dimmer than initially expected because of the expected shift in India’s energy mix fr ...
Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
It i ...
Wednesday, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
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- Attock Cement Pakistan Limited
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- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
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- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
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- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
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- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Eastern Energy - Thailand
- PNOC Exploration Corporation - Philippines
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- Interocean Group of Companies - India
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- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Sree Jayajothi Cements Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
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- Kideco Jaya Agung - Indonesia
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
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- PTC India Limited - India
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- Directorate General of MIneral and Coal - Indonesia
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- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
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- Lanco Infratech Ltd - India
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- The University of Queensland
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- Wilmar Investment Holdings
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- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tamil Nadu electricity Board
- Central Electricity Authority - India
- McConnell Dowell - Australia
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- PowerSource Philippines DevCo
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- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
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- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Karaikal Port Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Planning Commission, India
- Chettinad Cement Corporation Ltd - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- CIMB Investment Bank - Malaysia
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- Bulk Trading Sa - Switzerland
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- Georgia Ports Authority, United States
- Thai Mozambique Logistica
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- Bukit Asam (Persero) Tbk - Indonesia
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- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
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- Mintek Dendrill Indonesia
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- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Posco Energy - South Korea
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
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- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
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