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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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Wednesday, 05 August 20
SLUMP IN OIL REVENUE CHALLENGES MIDDLE EAST OIL EXPORTERS - INTERMODAL
The Covid-19 pandemic has had far-reaching consequences on the global capital markets. Despite the US government’s efforts for a quick and de ...
Tuesday, 04 August 20
KOEN INVITED BIDS FOR TOTAL 900K MT OF MIN 5600 NCV COAL FOR 3 YEARS
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 260,000 to 300,000 Tons (MT) min. ...
Tuesday, 04 August 20
THE WORLD’S FLEET OF COAL-FIRED POWER STATIONS HAS GOT SMALLER FOR THE FIRST TIME ON RECORD, WITH MORE CAPACITY RETIRED IN THE FIRST HALF OF 2020 THAN THE AMOUNT OPENED - IEA
This is according to the latest Global Coal Plant Tracker (GCPT) results by Global Energy Monitor (GEM), which we completed last month and report f ...
Monday, 03 August 20
U.S. COAL CONSUMPTION, WHICH HAS DECLINED SINCE ITS 2007 PEAK, FELL TO ITS LOWEST POINT IN APRIL 2020 - EIA
According to the U.S. Energy Information Administration’s (EIA) most recent Monthly Energy Review, the United States consumed 6.5 quadrillion ...
Monday, 03 August 20
LOW OIL PRICE AND CORONA VIRUS HIT SUB-SAHARAN AFRICA OIL PRODUCERS - FITCH RATINGS
The collapse in oil prices and the coronavirus shock is worsening the fiscal and external balances of sub-Saharan African oil producers, Fitch Rati ...
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- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Commonwealth Bank - Australia
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- International Coal Ventures Pvt Ltd - India
- GMR Energy Limited - India
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Indika Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Eastern Energy - Thailand
- Riau Bara Harum - Indonesia
- VISA Power Limited - India
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- SMC Global Power, Philippines
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Thiess Contractors Indonesia
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Lanco Infratech Ltd - India
- White Energy Company Limited
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Makarim & Taira - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Marubeni Corporation - India
- CNBM International Corporation - China
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Savvy Resources Ltd - HongKong
- GAC Shipping (India) Pvt Ltd
- Kepco SPC Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
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