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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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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- McConnell Dowell - Australia
- The University of Queensland
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- Directorate General of MIneral and Coal - Indonesia
- Singapore Mercantile Exchange
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Siam City Cement - Thailand
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Holcim Trading Pte Ltd - Singapore
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- SN Aboitiz Power Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Eastern Coal Council - USA
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Sinarmas Energy and Mining - Indonesia
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Pendopo Energi Batubara - Indonesia
- Sical Logistics Limited - India
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
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