We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
 Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their economies running. Trillions have been injected into global economies to fight unemployment and minimize recession. Apart from the central banks of EU, Japan, Switzerland, Sweden and Denmark, who have been offering negative rates for the past five years – a handful of central banks have now reduced their policy rates to near-zero values. Regardless of how successful or not the above mentioned five banks’ “experiment’’ has been, negative rates have undoubtedly made hedging strategies more complicated.
When it comes to the US Dollar, the Fed Chair has made it clear that negative rates are not part of its policy tools for the time being and that it is highly unlikely that rates will be pushed below zero. However, the US President has openly expressed that he views such a tool favourably. Although market experts do not expect negative Libor rates in the imminent future, no one can rule out the possibility of this happening.
These developments have had numerous effects on shipping companies who typically borrow using USD-Libor floating loans. The first and obvious outcome of lower Libor is the reduced borrowing cost. Whilst average 3-month LIBOR rates were 0.69%, 0.74% and 0.95% during the 2009, 2016 and 2020 (to date) recessions respectively, the 3-month LIBOR rate in July closed at 0.3% and has decreased approximately 6-fold since January (0.25%, as of 17/8). USD Libor loans have a zero lower bound limit which is incorporated by banks in their loan documentation (LMA) language: if Libor is less than zero “it will be deemed to be zero’’. This wording is also included in proposed documentation by the Alternative Reference Rates Committee, who is responsible for the development of Libor’s successor.
Low interest rates have also resulted in increased enquiries from bank clients who want to exploit their interest rate hedging options. Most shipping borrowers have decided not to hedge owing to the consensus that USD interest rates will not increase significantly over the next couple of years. Nevertheless, the number of shipping companies (mainly listed) that have engaged in hedging derivatives remain significant.
Under “normal” circumstances, a Cap or a SWAP for protection against an upward movement of interest rates would be the norm. However, nowadays it is essential to provision for negative interest rates. The borrower who hedges should bear in mind that USD Libor can also turn negative. Some banks even “encourage” clients to include a Floor in their SWAPS which will prevent base rates on their loans from dropping below zero. This limits the extent to which their derivatives can fall “out of the money”. Such protection comes at a premium. Indicatively, a 5 year SWAP is priced at 0.37 %, while the cost of a Floor is [10-30] bps. With rates expected to remain close to zero, the SWAP protection premium will continue to rise for as long as there are statements in favour of negative rates such as that of President Trump. However, whether the cost of protecting of a company’s future cash flows through the xyz premium is high or not is also a matter of perception and is reflective of one’s risk profile.
By George Laios
Deputy CEO, Intermodal Group
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
Mr.George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Tuesday, 25 August 20
INDIA'S IMPORTS FALL AS LOCKDOWNS IMPACT THE POWER AND INDUSTRIAL SECTORS - REPORT
India is the world’s second largest thermal coal consumer and importer, importing an estimated 211 million tonnes of thermal coal in 2019.&nb ...
Monday, 24 August 20
A COMBINATION OF DEVELOPMENTS DROVE THE FALLOFF COAL PRICES - CHIEF ECONOMIST’ OFFICE, AUSTRALIA
China, rising domestic production combined with subdued power demand;
India, a lockdown coupled with government directives that fav ...
Monday, 24 August 20
AUSTRALIA'S THERMAL COAL EXPORTS ARE FORECAST TO DROP FROM AN ESTIMATED $20 BILLION IN 2019-20 TO $16 BILLION IN 2020-21: REPORT
Thermal coal spot prices have fallen sharply as the impact of COVID-19 drives a contraction in seaborne trade for only the second time this century ...
Saturday, 22 August 20
REPORT SEES INDIA’S RELIANCE ON THERMAL POWER DROPPING TO 50% IN 2021, 43% IN 2026 - ET ENERGY | IEEFA
India’s dependence on thermal power will reduce to 50 per cent by 2021-22 and 43 per cent by 2026-27 on the back of renewable energy (RE) cap ...
Friday, 21 August 20
323 MILLION ELECTRIC VEHICLES WILL BE ON THE ROADS BY 2040 - WOOD MACKENZIE
Electric vehicle (EV) sales are expected to reach 45 million units per year by 2040, with a total global EV stock of 323 million, according to new ...
|
|
|
Showing 816 to 820 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Bangladesh Power Developement Board
- Attock Cement Pakistan Limited
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- SMG Consultants - Indonesia
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Thiess Contractors Indonesia
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- PTC India Limited - India
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Australian Coal Association
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- Mercator Lines Limited - India
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- New Zealand Coal & Carbon
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- IEA Clean Coal Centre - UK
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kumho Petrochemical, South Korea
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- London Commodity Brokers - England
|
| |
| |
|
