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