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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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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Aditya Birla Group - India
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- AsiaOL BioFuels Corp., Philippines
- PetroVietnam Power Coal Import and Supply Company
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parliament of New Zealand
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- TeaM Sual Corporation - Philippines
- Lanco Infratech Ltd - India
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- LBH Netherlands Bv - Netherlands
- Vizag Seaport Private Limited - India
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Power Finance Corporation Ltd., India
- Latin American Coal - Colombia
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Africa Commodities Group - South Africa
- Alfred C Toepfer International GmbH - Germany
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
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