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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, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- GAC Shipping (India) Pvt Ltd
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Vizag Seaport Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Sarangani Energy Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Thai Mozambique Logistica
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kohat Cement Company Ltd. - Pakistan
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Singapore Mercantile Exchange
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Xindia Steels Limited - India
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Kaltim Prima Coal - Indonesia
- Malabar Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Kumho Petrochemical, South Korea
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Anglo American - United Kingdom
- Uttam Galva Steels Limited - India
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
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