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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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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Ind-Barath Power Infra Limited - India
- London Commodity Brokers - England
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Holcim Trading Pte Ltd - Singapore
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Simpson Spence & Young - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Karaikal Port Pvt Ltd - India
- VISA Power Limited - India
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Thai Mozambique Logistica
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