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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, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announc ...
Wednesday, 24 June 20
MARKET INSIGHT - INTERMODAL
The World Bank estimates that the global economy will fall by 5.2% this year, underlining that the Covid-19 pandemic has had rapid and massive cons ...
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- Holcim Trading Pte Ltd - Singapore
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Indian Oil Corporation Limited
- Australian Coal Association
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Meralco Power Generation, Philippines
- Gujarat Sidhee Cement - India
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- ICICI Bank Limited - India
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Larsen & Toubro Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Semirara Mining Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aditya Birla Group - India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Sindya Power Generating Company Private Ltd
- OPG Power Generation Pvt Ltd - India
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Parry Sugars Refinery, India
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Makarim & Taira - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- White Energy Company Limited
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- SMC Global Power, Philippines
- Electricity Authority, New Zealand
- GMR Energy Limited - India
- London Commodity Brokers - England
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Global Green Power PLC Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Sakthi Sugars Limited - India
- Carbofer General Trading SA - India
- New Zealand Coal & Carbon
- The University of Queensland
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Coalindo Energy - Indonesia
- Sical Logistics Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Essar Steel Hazira Ltd - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Coal Council - USA
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
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