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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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Tuesday, 23 June 20
COVID-19 COULD CAUSE A BOOM IN COAL POWER - RYSTAD ENERGY | OILPRICE
COVID-19 has not only impacted the energy industry’s revenues but also its infrastructure development.
The delay of new natural gas ...
Tuesday, 23 June 20
CHINA'S COAL OUTPUT UP 0.9 PCT IN JANUARY-MAY: XINHUA
Output of raw coal in China rose 0.9 percent year on year to 1.47 billion tonnes in the first five months of this year, official data showed.
& ...
Monday, 22 June 20
KAMSARMAX TYPES REGULARLY HIT THE $9,000 PER DAY LEVEL FOR INDONESIAN COAL RUN TO CHINA, BALTIC BRIEFING SAYS
Capesize
The Capesize market trajectory this week has been one of the steepest rallies the sector has experienced. Opening at $12,410, the sect ...
Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals im ...
Saturday, 20 June 20
NO ESCAPING GLOBAL TRADE SLUMP - BALTIC EXCHANGE
Those hoping for a decent recovery in trade in the second half of the year should prepare for disappointment.
New data from the Unit ...
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- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indogreen Group - Indonesia
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
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- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- ICICI Bank Limited - India
- Ministry of Mines - Canada
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Australian Coal Association
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Electricity Generating Authority of Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Economic Council, Georgia
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Dalmia Cement Bharat India
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indika Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Wilmar Investment Holdings
- PTC India Limited - India
- The Treasury - Australian Government
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Pipit Mutiara Jaya. PT, Indonesia
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Posco Energy - South Korea
- Thai Mozambique Logistica
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Formosa Plastics Group - Taiwan
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Baramulti Group, Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Globalindo Alam Lestari - Indonesia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Wood Mackenzie - Singapore
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Cement Manufacturers Association - India
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Planning Commission, India
- Parliament of New Zealand
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Iligan Light & Power Inc, Philippines
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Latin American Coal - Colombia
- Vedanta Resources Plc - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Petron Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Star Paper Mills Limited - India
- Power Finance Corporation Ltd., India
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- Bank of Tokyo Mitsubishi UFJ Ltd
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