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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, 10 September 20
U.S. COAL PRODUCTION IN 2020 TO BE 511 MMST, 28 PER CENT LOWER THAN IN 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 511 million short tons (MMst), 194 MMst (28%) lower than in 2019. Mitigation efforts related t ...
Thursday, 10 September 20
DRY BULK SHIPPING: CHINA'S DEMAND KEEPING THE DRY BULK MARKET GOING - PETER SAND | BIMCO
Overview
An impressive recovery in Chinese dry bulk imports has protected the industry from the effects of falling demand in the rest of the wo ...
Thursday, 10 September 20
TANKER SHIPPING: FREIGHT RATES BACK AT LOSS-MAKING LEVELS AFTER 12 VERY PROFITABLE MONTHS - BIMCO
Overview
A stunningly strong 12 months for the tanker shipping industry is now being replaced by lower freight rates, as lower oil product ...
Thursday, 10 September 20
INDIA'S COAL IMPORTS STUMBLE IN AUGUST, RAISING RISK OF SLOW RECOVERY - REFINITIV | BANCHERO COSTA
After posting a mild recovery in July, India's coal imports have stumbled in August as the South Asian nation battles to restart it ...
Thursday, 10 September 20
THE FIRST 8 MONTHS OF 2020, INDONESIA EXPORTED 217.4 MLN TONNES OF COAL BASED ON REFINITIV - BANCHERO COSTA
The coal market has been hit by a weaker global economy as a result of COVID-19 pandemic and falling industrial electricity demand ...
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- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Star Paper Mills Limited - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- European Bulk Services B.V. - Netherlands
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Wilmar Investment Holdings
- White Energy Company Limited
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- PTC India Limited - India
- LBH Netherlands Bv - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Orica Australia Pty. Ltd.
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Indogreen Group - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Petron Corporation, Philippines
- The Treasury - Australian Government
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Africa Commodities Group - South Africa
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Madhucon Powers Ltd - India
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Energy Link Ltd, New Zealand
- Minerals Council of Australia
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
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