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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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Friday, 10 July 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 10 July 20
GLOBAL SHIPPING EARNINGS FORECAST CUT AS SUPPLY SET TO OUTSTRIP DEMAND - MOODY'S
EBITDA forecast worsens, keeping outlook negative. We now expect the aggregate EBITDA of rated shipping companies to fall by around 16%-18% in 2020 ...
Wednesday, 08 July 20
MARKET INSIGHT - INTERMODAL
During the previous month, the dry bulk market witnessed an impressive increase in the BDI index that has reached 1800 points from 500 with a clear ...
Tuesday, 07 July 20
COAL INDIA WORKERS STRIKE CUTS OUTPUT BY 56%: OFFICIAL - REUTERS
A strike at Coal India Ltd cut production by 56% in the three days ending July 4 as workers oppose opening up coal mining to the private sector, a ...
Tuesday, 07 July 20
WHAT DOES THE PATHWAY TO A NET-ZERO ECONOMY LOOK LIKE FOR MINERS? - WOOD MACKENZIE
Wind, solar, electric vehicles, stationary storage and transmission are all central to achieving the Paris Agreement decarbonisation goals.
&nb ...
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- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Krishnapatnam Port Company Ltd. - India
- Savvy Resources Ltd - HongKong
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Malabar Cements Ltd - India
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- Australian Coal Association
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Thai Mozambique Logistica
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- VISA Power Limited - India
- Maheswari Brothers Coal Limited - India
- SMC Global Power, Philippines
- Economic Council, Georgia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Sindya Power Generating Company Private Ltd
- Chamber of Mines of South Africa
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Indonesian Coal Mining Association
- TeaM Sual Corporation - Philippines
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Marubeni Corporation - India
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Jaiprakash Power Ventures ltd
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Essar Steel Hazira Ltd - India
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Cigading International Bulk Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Gujarat Sidhee Cement - India
- McConnell Dowell - Australia
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
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