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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, 19 June 20
INDIA'S COAL CONSUMPTION GROWTH IN 2019 SLOWEST SINCE 2001: BP STATS REVIEW - HINDU BUSINESS LINE
Growth in global energy markets slowed in 2019 in line with weaker economic growth, according to the bp Statistical Review of World Energy 2020. Th ...
Friday, 19 June 20
KOWEPO TO IMPORT 1,050,000 MT OF MIN 5300 NCV COAL FOR THREE YEARS
COALspot.com: Korera Western Power Co., Ltd. (KOWEPO) has issued an International tender for Total 1,050k MT Min.5,300 kcal/kg NCV coal for t ...
Thursday, 18 June 20
INDIA: GOVT'S PLAN TO CUT COAL IMPORT GOES FOR A TOSS AS FY20 BREAKS LOGISTICS CHAIN; LOCAL OUTPUT STAGNANT - FINANCIAL EXPRESS
Weak logistics support and disrupted supply chain towards the end of the last financial year 2019-20 hit the government’s plan to cut coal im ...
Thursday, 18 June 20
INDIA: THERMAL PLANTS TO OPERATE BELOW 53% CAPACITY IN FY21 AS POWER DEMAND DIPS - BUSINESS STANDARD
The Plant Load Factor (PLF) of thermal power stations across the country is projected to dip below 53 per cent in this fiscal. Muted power demand f ...
Wednesday, 17 June 20
MARKET INSIGHT - INTERMODAL
After experiencing record earnings during the first half of the year, the focus of headlines concerning the tanker market has shifted from the deve ...
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- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Agrawal Coal Company - India
- Binh Thuan Hamico - Vietnam
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- The University of Queensland
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Kartika Selabumi Mining - Indonesia
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Salva Resources Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Global Coal Blending Company Limited - Australia
- Romanian Commodities Exchange
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Bulk Trading Sa - Switzerland
- Essar Steel Hazira Ltd - India
- MS Steel International - UAE
- SMG Consultants - Indonesia
- White Energy Company Limited
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Maheswari Brothers Coal Limited - India
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Bhatia International Limited - India
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