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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, 15 July 20
CHINA'S JUNE COAL IMPORTS FALL 6.7% Y/Y ON PORT CURBS - REUTERS
China’s coal imports dropped 6.7% in June from the same period last year, as stringent import restrictions at ports impeded purchases by trad ...
Wednesday, 15 July 20
MARKET INSIGHT - INTERMODAL
The Covid-19 virus spread around the world has obviously impacted the global oil demand while the situation remains fluid. The overall constraint ...
Tuesday, 14 July 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.75 PCT - XINHUA
China Taiyuan coal transaction price index stood at 126.01 points Monday, up 0.75 percent week on week.
The index, released by China ...
Tuesday, 14 July 20
TURKEY - A CASE OF UNDECLARED BUNKER - GARD
KNOWLEDGE TO ELEVATE
Undeclared/excess bunkers can be considered a criminal act by Turkish customs officials with the ship's crew being ac ...
Monday, 13 July 20
PANAMAX: A TUMULTUOUS WEEK IN THE PANAMAX MARKET ENSURED ALL MARKETS GAINED VALUE ON THE WEEK - BALTIC BRIEFING
Capesize
This week witnessed the dreaded correction in the Capesize market, with the time charter average shedding almost 18 per cent to close ...
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- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- Kideco Jaya Agung - Indonesia
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- The University of Queensland
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- ICICI Bank Limited - India
- ASAPP Information Group - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Central Electricity Authority - India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Agrawal Coal Company - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Australian Coal Association
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mintek Dendrill Indonesia
- Petron Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Ministry of Finance - Indonesia
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Rashtriya Ispat Nigam Limited - India
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Indogreen Group - Indonesia
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Videocon Industries ltd - India
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Straits Asia Resources Limited - Singapore
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- New Zealand Coal & Carbon
- Meenaskhi Energy Private Limited - India
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Kobexindo Tractors - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Xindia Steels Limited - India
- Parliament of New Zealand
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Trasteel International SA, Italy
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Price Waterhouse Coopers - Russia
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