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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, 09 November 23
GREEK AND CHINESE COMPANIES OWN 34% OF THE GLOBAL FLEET’S CARGO CAPACITY - BIMCO
“The global fleet of cargo carrying ships consists of around 61,000 ships with a deadweight capacity of about 2,200 million tonnes. The ships ...
Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
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- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Jindal Steel & Power Ltd - India
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Ministry of Transport, Egypt
- Wood Mackenzie - Singapore
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Planning Commission, India
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Orica Australia Pty. Ltd.
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Mercator Lines Limited - India
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Vedanta Resources Plc - India
- TNB Fuel Sdn Bhd - Malaysia
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Dalmia Cement Bharat India
- Indian Oil Corporation Limited
- India Bulls Power Limited - India
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Chettinad Cement Corporation Ltd - India
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- PowerSource Philippines DevCo
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
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