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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, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest priva ...
Thursday, 06 August 20
SUPRAMAX MARKET CONTINUED SIDEWAYS TREND, AND LITTLE INSPIRING NEWS APPEAR - FEARNLEYS
Capesize
There is presently a small correction in rates, but overall levels are up from previous week mainly due to increased demand in the Eas ...
Thursday, 06 August 20
KOREA SOUTH-EAST POWER INVITING BIDS FOR MIN 3,600-MAX 3,800 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) inviting bids for 80,000 Tons (MT) Min 3,600~Max 3,800 kcal/kg NCV coal f ...
Wednesday, 05 August 20
NO NEW MINING LICENSES - A REMINDER TO GOVERNORS IN INDONESIA - SSEK
Indonesia’s acting Director General of Mining and Coal (“DGMC”) has issued a letter to the country’s provincial Governors t ...
Wednesday, 05 August 20
AUGUST 2020 HBA HITTING ITS LOWEST LEVELS IN HISTORY
COALspot.com: The Indonesia Coal Price Reference for the month of August plunged 30.73% YoY, hitting its lowest levels in history and highlighting ...
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- CNBM International Corporation - China
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Cement Manufacturers Association - India
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Aditya Birla Group - India
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- White Energy Company Limited
- Global Business Power Corporation, Philippines
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Australian Coal Association
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Tamil Nadu electricity Board
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- The University of Queensland
- Jorong Barutama Greston.PT - Indonesia
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- PTC India Limited - India
- Romanian Commodities Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Indian Oil Corporation Limited
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Posco Energy - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Meralco Power Generation, Philippines
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Bangladesh Power Developement Board
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
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