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Saturday, 22 February 14
POTEN RAISES THE QUESTION OF ACCURACY IN CALCULATING TANKER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the tanker market has grown in complexity over the course of the past few years, the question of whether the traditional methods of assessing rates is still valid. In a recent report, Poten & Partners noted that "the market landscape for crude oil and refined product trades has an inherent element of shifting sand, presenting an organization like the Baltic Exchange with certain challenges. The Baltic Exchange is a centuries-old institution that, among other services, oversees a collective of member shipbrokers who contribute daily freight rate assessments for the wet and dry bulk shipping markets. The freight rates that are collected by the Baltic Exchange are in turn used by both charterers and shipowners, as well as other market participants, as a reliable metric of freight pricing for internal and external financial calculations. Although the birth and death of trade lanes is a natural market evolution, such developments pose questions of relevancy to the Baltic Exchange’s data collection efforts. While the decision to discontinue a certain set of assessments due to perceived obsolescence is objectively simple, it could have broader implications for commercial market participants that have freight contracts dependent on these rates", Poten said.
According to the analyst, the Baltic Dirty Tanker Index. This index is currently comprised of 12 benchmark tanker routes, covering all trade routes and vessel sizes. The BDTI serves as an often cited reference of general health of the tanker market freight rate environment. The Baltic Exchange International Tanker Routes (BITR) are quoted on individual trades for specific cargo sizes for clean and dirty cargoes. For example, the tanker trade with the largest volume worldwide is often referred to as “TD3” or “Tanker Dirty” route number “3” – the voyage basis is from Ras Tanura, Saudi Arabia to Chiba, Japan for 265,000 metric tons of cargo".
In the report, Poten cited an announcement issued on February 5, 2014, which indicated that the Baltic Exchange was suspending their assessments of the routes “TC3_38” and “TD10D”, Aruba – New York for 38,000 metric tons of clean products and Aruba – New York for 50,000 metric tons of fuel oil, respectively. The removal of TD10D would leave the market without a Baltic Exchange instrument for quoting Panamax freight rates.
Poten noted that "in early 2012, Valero shut down their 235,000 bpd Aruba refinery, effectively rendering the voyage basis irrelevant. Historically, the Aruba refinery yielded significant volumes of fuel oil that were exported and often utilized as feedstock in Valero’s Paulsboro, N.J. refinery or for power generation on the US East Coast. The Aruba refinery eventually became structurally disadvantaged compared to US Gulf Coast refineries due to a higher operational cost base; it, like other Caribbean refineries, did not have access to cheap natural gas for power supply. Using reported spot market activity for Panamaxes loading in the Caribbean as a proxy for total market activity, trade volumes from the Caribbean to the US Atlantic Coast have become insignificant. Although still a relatively small market, fixture activity has increased for the Caribbean to US Gulf trade".
It added that "it stands to reason that the Baltic Exchange should continue to assess at least one dirty Panamax trade route. Contracts of Affreightment, or COAs, whereby shipowners and oil companies pre-arrange transportation volumes over a specified period of time, often incorporate some kind of discount to prevailing spot market rates. In exchange for a guaranteed volume of business from an oil company, a shipowner or pool will typically offer a discount to market rates. The Baltic Exchange rate assessments are often referenced in contract language accordingly. The same logic applies for time charters that involve profit sharing elements; shipowners and charterers agree how the profit share will be determined based on independent freight rate assessments.
In the case of TD10D, the Baltic Exchange might consider changing the voyage basis in order to prevent commerical disruption. Load ports for crude export in countries such as Venezuela, Colombia or Trinidad are viable options and the destination should, undoubtedly, be in the US Gulf. The question of what to do with the Aruba to New York (TC3) benchmark for clean products is more black and white. The sizeable increase in refined products exports from the US Gulf to the Caribbean and Latin American countries has displaced imports from the Caribbean. With strong refining economics in the US Gulf, it is difficult to see any reversal in this trend anytime soon", Poten concluded.
source: Nikos Roussanoglou, Hellenic Shipping News
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Friday, 21 February 14
INDONESIA PLAN TO CAP COAL OUTPUT AND HIKE ROYALTY; START MUSIC
COALspot.com: Energy and Mineral Resources Ministy of Indonesia is planning to increase the royalty for coal miners particularly for Mining Business ...
Friday, 21 February 14
THE WORLD'S SECOND LARGEST COAL MINER MINED 19.2 MMST OF COAL IN A WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, mined approximately 19.2 million short tons (mmst) of coal in a w ...
Friday, 21 February 14
DRY BULK MARKET SHOWS SIGNS OF LIFE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has slowly started to emerge from the downfall it's been since the start of the year, as rates have began to pick up over the c ...
Friday, 21 February 14
INDONESIA COAL OUTPUT CAP TO HURT MINERS RELIANT ON VOLUME GROWTH, FITCH SAYS
Fitch Ratings says that the credit profiles of mining sub-contractors and miners highly reliant on increasing volumes to support high debt servicing w ...
Thursday, 20 February 14
LENGTHY DELAYS TO PANAMA CANAL EXPANSION POSE GLOBAL TRADE RISKS; US COAL PRODUCERS TO GREATLY BENEFIT ONCE COMPLETE, SAYS WOOD MACKENZIE
Wood Mackenzie expects the recent cost overrun disputes around the Panama Canal expansion to be resolved with limited disruption due to the signific ...
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- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mjunction Services Limited - India
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Central Java Power - Indonesia
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Coal and Oil Company - UAE
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Interocean Group of Companies - India
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Edison Trading Spa - Italy
- Chettinad Cement Corporation Ltd - India
- Maheswari Brothers Coal Limited - India
- Deloitte Consulting - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Therma Luzon, Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Kapuas Tunggal Persada - Indonesia
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- PTC India Limited - India
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- The University of Queensland
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Australian Commodity Traders Exchange
- Planning Commission, India
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- Australian Coal Association
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- White Energy Company Limited
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