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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, 06 July 20
INDONESIAN COAL PRICE REFERENCE IN FREE FALL
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
Monday, 06 July 20
SUPRAMAX: A 58,000-DWT FIXING DELIVERY VIETNAM TRIP VIA INDONESIA RE-DELIVERY WEST INDIA IN THE LOW $4,000S
Capesize
The Capesize market continues to go from strength to strength, as rates reach highs not seen since September last year. The rally is p ...
Thursday, 02 July 20
PRIVATE COAL MINING MAY SEE WEAK INVESTOR SENTIMENT: ICRA - LIVEMINT
The prospects of commercial coal mining in India may be dimmer than initially expected because of the expected shift in India’s energy mix fr ...
Wednesday, 01 July 20
THERMAL COAL OPTIONS TRADING LAUNCHED IN CHINA'S ZHENGZHOU - XINHUA
Thermal coal options started trading on the Zhengzhou Commodity Exchange (ZCE) in central China’s Henan Province Tuesday.
It i ...
Wednesday, 01 July 20
COLOMBIA'S COAL EXPORT VOLUMES HAVE STEADILY DECLINED IN RECENT YEARS - BANCHERO COSTA
Colombia is the world’s fifth largest seaborne exporter of coal, coming after Australia, Indonesia, Russia and the USA.
Export ...
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- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
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- Sojitz Corporation - Japan
- Pendopo Energi Batubara - Indonesia
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- Samtan Co., Ltd - South Korea
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- SN Aboitiz Power Inc, Philippines
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- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- CNBM International Corporation - China
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- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
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- Coastal Gujarat Power Limited - India
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- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
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- Coal and Oil Company - UAE
- Trasteel International SA, Italy
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- Sakthi Sugars Limited - India
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- Sinarmas Energy and Mining - Indonesia
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- Energy Link Ltd, New Zealand
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- Mjunction Services Limited - India
- PetroVietnam Power Coal Import and Supply Company
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- Asmin Koalindo Tuhup - Indonesia
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- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
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- Bukit Baiduri Energy - Indonesia
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
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- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- Indonesian Coal Mining Association
- Bhatia International Limited - India
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- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- VISA Power Limited - India
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- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
- Siam City Cement - Thailand
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- Ceylon Electricity Board - Sri Lanka
- International Coal Ventures Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
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- Orica Australia Pty. Ltd.
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- Uttam Galva Steels Limited - India
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- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- New Zealand Coal & Carbon
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- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Electricity Authority, New Zealand
- Ambuja Cements Ltd - India
- Australian Coal Association
- PTC India Limited - India
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
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- Indogreen Group - Indonesia
- White Energy Company Limited
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- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Planning Commission, India
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- Global Green Power PLC Corporation, Philippines
- The Treasury - Australian Government
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Bhushan Steel Limited - India
- Africa Commodities Group - South Africa
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- Globalindo Alam Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Parliament of New Zealand
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
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