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