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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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Sunday, 10 September 23
CHINA AUGUST COAL IMPORTS OF 44.3 MLN T HIT RECORD - REUTERS
China, the world’s top coal consumer, imported 44.3 million metric tons of the fuel last month, customs data showed, the highest amount in an ...
Tuesday, 22 August 23
CHINA'S COAL PRODUCTION LOGS STEADY GROWTH IN JANUARY-JULY: XINHUA
China’s output of raw coal went up 3.6 percent year on year in the first seven months of this year, official data showed.
The ...
Sunday, 13 August 23
THE COMMODITIES FEED: LNG SUPPLY RISKS LINGER - ING
Energy – OPEC sees deficit over remainder of 2023
Oil prices came under some pressure yesterday with ICE Brent settling a litt ...
Wednesday, 09 August 23
COAL TRADE TO RETURN TO 2019 LEVELS - BALTIC EXCHANGE
The International Energy Agency’s mid-year Coal Market Update for 2023 brings both positive and concerning news for the global coal industry. ...
Sunday, 23 July 23
ANALYSIS-INDIA'S COAL MINING BET STUMBLES AS WARY BANKS WEIGH RISING RISKS - REUTERS
India’s drive to ramp up coal output to meet growing energy demand is faltering due to banks’ reluctance to finance newly auctioned min ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Electricity Generating Authority of Thailand
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Rio Tinto Coal - Australia
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Miang Besar Coal Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- PTC India Limited - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Sical Logistics Limited - India
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- GAC Shipping (India) Pvt Ltd
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Deloitte Consulting - India
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Singapore Mercantile Exchange
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- Samtan Co., Ltd - South Korea
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Bulk Trading Sa - Switzerland
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Ministry of Finance - Indonesia
- Australian Coal Association
- Mintek Dendrill Indonesia
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- White Energy Company Limited
- Baramulti Group, Indonesia
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Romanian Commodities Exchange
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- Goldman Sachs - Singapore
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
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