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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, 18 September 20
INDIA'S COAL-FIRED POWER OUTPUT PICKS UP AS INDUSTRIAL USE RISES - REUTERS
India’s coal-fired electricity generation rose 9.4% in the first half of September, provisional government data showed, as demand from indust ...
Friday, 18 September 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 17 September 20
LAST HOPES FOR DEMAND GROWTH SET TO DISAPPOINT THERMAL COAL EXPORTERS - IEEFA
Asian thermal coal exporters are fighting an uphill battle even in new markets
The world’s largest thermal coal exporter is eyeing new m ...
Wednesday, 16 September 20
MARKET INSIGHT - INTERMODAL
Another active week in terms of SnP has concluded in the dry bulk market with a diversified array of transactions recorded. Despite the correction ...
Friday, 11 September 20
IMO 2020: A REVIEW OF THE TRANSITION TO VLSFOS - GARD
KNOWLEDGE TO ELEVATE
Many predictions were made in the run up to the imposition of the MARPOL 2020 sulphur cap, none of which was that the tra ...
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- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
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- Mjunction Services Limited - India
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- Ministry of Transport, Egypt
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- Chamber of Mines of South Africa
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- Karbindo Abesyapradhi - Indoneisa
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- Independent Power Producers Association of India
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- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
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- Mercuria Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- Parry Sugars Refinery, India
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
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- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- The State Trading Corporation of India Ltd
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- Thai Mozambique Logistica
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
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- The University of Queensland
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- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
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- Interocean Group of Companies - India
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- Miang Besar Coal Terminal - Indonesia
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- Riau Bara Harum - Indonesia
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- Bharathi Cement Corporation - India
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- Coastal Gujarat Power Limited - India
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- PTC India Limited - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Energy Link Ltd, New Zealand
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Toyota Tsusho Corporation, Japan
- Agrawal Coal Company - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Siam City Cement - Thailand
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
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- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
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- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
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- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Deloitte Consulting - India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
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- Cement Manufacturers Association - India
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- Minerals Council of Australia
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