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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, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- Australian Commodity Traders Exchange
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Thai Mozambique Logistica
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Deloitte Consulting - India
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Coal and Oil Company - UAE
- Directorate General of MIneral and Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Coastal Gujarat Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Binh Thuan Hamico - Vietnam
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aditya Birla Group - India
- SN Aboitiz Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- Indika Energy - Indonesia
- Minerals Council of Australia
- Singapore Mercantile Exchange
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Kideco Jaya Agung - Indonesia
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Mercator Lines Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Ceylon Electricity Board - Sri Lanka
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Global Coal Blending Company Limited - Australia
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Commonwealth Bank - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Leighton Contractors Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Medco Energi Mining Internasional
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- The State Trading Corporation of India Ltd
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Latin American Coal - Colombia
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Toyota Tsusho Corporation, Japan
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