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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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- Romanian Commodities Exchange
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- VISA Power Limited - India
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Binh Thuan Hamico - Vietnam
- Global Green Power PLC Corporation, Philippines
- Standard Chartered Bank - UAE
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Rio Tinto Coal - Australia
- PTC India Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- SMC Global Power, Philippines
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Straits Asia Resources Limited - Singapore
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Australian Coal Association
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Karaikal Port Pvt Ltd - India
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