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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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Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
This year, the use of coal by the U.S.’s power producers has been so anemic that the fuel has not achieved a 20% market share in any month so ...
Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Deloitte Consulting - India
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Posco Energy - South Korea
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Siam City Cement PLC, Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Energy Development Corp, Philippines
- Australian Coal Association
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Electricity Generating Authority of Thailand
- Maharashtra Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- Kohat Cement Company Ltd. - Pakistan
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Coal and Oil Company - UAE
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- The University of Queensland
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Planning Commission, India
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
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