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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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Monday, 20 July 20
COAL INDIA LAUNCHES SPECIAL CATEGORY OF E-AUCTION FOR COAL IMPORTERS - BUSINESS STANDARD
Coal India (CIL) on Friday launched a special category of e-auction for importers of coal. This is in line with the government’s declaration ...
Monday, 20 July 20
OIL PRICE OF $40-43 PER BARREL MORE OR LESS BALANCED - NOVAK | TASS
The Russian Ministry of Energy considers the current oil price of $40-43 per barrel more or less balanced and does not expect price changes after t ...
Monday, 20 July 20
SUPRAMAX: A 63,000 OPEN NORTH CHINA FIXING AN AUSTRALIAN ROUND IN THE LOW $10,000S - BALTIC BRIEFING
Capesize
The capesize market showed some resistance this week to recent losses as all routes saw a small uptick in value to end the week. With ...
Friday, 17 July 20
MISC MALAYSIA ENTERS INTO PURCHASE AGREEMENTS AND TIME CHARTER PARTIES FOR SIX VLECS
MISC Berhad (MISC) has entered into Memorandum of Agreements (MOAs) with six indirect wholly-owned subsidiaries of Zhejiang Satellite Petrochem ...
Wednesday, 15 July 20
HOW MEANINGFUL ARE SOME ESTIMATES FOR INDIA’S COAL CONSUMPTION DATA? - IEEFA
In recent years, BP's estimates for India have contained what appears to be a record of over-optimistic projections
BP’s a ...
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- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- VISA Power Limited - India
- The State Trading Corporation of India Ltd
- Central Electricity Authority - India
- Ind-Barath Power Infra Limited - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Iligan Light & Power Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Minerals Council of Australia
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
- Intertek Mineral Services - Indonesia
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Attock Cement Pakistan Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- White Energy Company Limited
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Mercuria Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Manunggal Multi Energi - Indonesia
- Tamil Nadu electricity Board
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
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