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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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Monday, 08 January 24
KOSPO TO BUY 80000 MT OF INDONESIAN LOW CALORIFIC VALUE COAL FOR FEB 2024
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for the supply of Indonesian Low Calorific Value Coal from qualified suppliers for Korean ...
Monday, 08 January 24
SEABORNE TRADE REACHES 12.4BN TONNES - CLARKSONS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
Monday, 08 January 24
CAPESIZES START THE NEW YEAR ON POSITIVE NOTE - BALTIC EXCHANGE
Capesize
This week the capsize market has been marked by a mix of activities and challenges. Despite a slow start following the Christmas and N ...
Friday, 05 January 24
MORGAN STANLEY SEES LOWER OIL PRICES IN 2024 ON OVERSUPPLY CONCERNS - REUTERS
Morgan Stanley sees Brent crude prices anchored near $80 per barrel in the first half in 2024 before declining towards the end of the year as it ex ...
Friday, 05 January 24
INDIA'S COAL OUTPUT RISES NEARLY 11 PC IN DEC TO 92.87 MT - PTI
India’s coal production increased by 10.75 per cent to 92.87 million tonne in December 2023 as compared to the year-ago period, an official s ...
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- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Link Ltd, New Zealand
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- London Commodity Brokers - England
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Rio Tinto Coal - Australia
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- MS Steel International - UAE
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- The University of Queensland
- Xindia Steels Limited - India
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- India Bulls Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Parliament of New Zealand
- VISA Power Limited - India
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