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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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Tuesday, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Aboitiz Power Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Manunggal Multi Energi - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Planning Commission, India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Bukit Baiduri Energy - Indonesia
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- Energy Link Ltd, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Grasim Industreis Ltd - India
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Bharathi Cement Corporation - India
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- IEA Clean Coal Centre - UK
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- ASAPP Information Group - India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indika Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Barasentosa Lestari - Indonesia
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Coalindo Energy - Indonesia
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Deloitte Consulting - India
- London Commodity Brokers - England
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Sarangani Energy Corporation, Philippines
- Siam City Cement PLC, Thailand
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Mercuria Energy - Indonesia
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Eastern Coal Council - USA
- Latin American Coal - Colombia
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
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