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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, 09 June 20
INDIA: COAL IMPORT DROPS BY 20% TO NEARLY 19 MILLION TONNES IN MAY, SAYS REPORT - HINDUSTAN TIMES
The country’s coal import dropped by 20 per cent to 18.93 million tonnes (MT) last month, industry data showed.
The government ...
Monday, 08 June 20
WOOD MACKENZIE: THE INDISPENSABLE OPEC+
Rumours of “the death of OPEC” have been circulating for almost as long as the organisation has existed. Just three years after the car ...
Monday, 08 June 20
CHINA'S COAL IMPORTS FALL NEARLY 20% IN MAY EVEN AS DEMAND RISES - REUTERS
China’s coal imports in May fell nearly 20% compared with a year earlier even as demand recovered at power plants and industrial users, custo ...
Monday, 08 June 20
JUNE 2020 INDONESIAN COAL PRICE REFERENCE HIT US$ 52.98 A TON, ITS LOWEST LEVEL SINCE AT LEAST AUGUST 2016
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Sunday, 07 June 20
A SCRUBBER FITTED 61,000 ULTRAMAX WAS FIXED DELIVERY PHILIPPINES TRIP VIA SOUTH AFRICA REDELIVERY VIETNAM AT $9,500 - BALTIC BRIEFING
Capesize
The small flicker of hope at the beginning of this week has kindled a small fire under the Capesize market. At a paltry $3369 from the ...
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- Ambuja Cements Ltd - India
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Madhucon Powers Ltd - India
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Jindal Steel & Power Ltd - India
- Economic Council, Georgia
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- The University of Queensland
- Planning Commission, India
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Bulk Trading Sa - Switzerland
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Marubeni Corporation - India
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- Indian Oil Corporation Limited
- Coal and Oil Company - UAE
- Global Business Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Edison Trading Spa - Italy
- White Energy Company Limited
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- GAC Shipping (India) Pvt Ltd
- Sindya Power Generating Company Private Ltd
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Africa Commodities Group - South Africa
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- IEA Clean Coal Centre - UK
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- MS Steel International - UAE
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Samtan Co., Ltd - South Korea
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
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