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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, 16 April 23
CHINA JUGGLES FOUR MAJOR ECONOMIC CHANGES IN 2023 - WOOD MACKENZIE
Change is afoot in China. Economic growth is slowing, while rising political tensions between China and the US, coupled with global supply chain re ...
Sunday, 16 April 23
CHINA'S MARCH COAL IMPORTS JUMP TO 3-YEAR HIGH - REUTERS
China’s coal imports surged in March to their highest in any month over the past three years as utilities increased purchases on expectations ...
Sunday, 16 April 23
OPEC KEEPS WORLD OIL DEMAND GROWTH OUTLOOK UNCHANGED
The OPEC Reference Basket (ORB) declined in March by $3.43, or 4.2%, m-o-m to average $78.45/b. The ICE Brent first-month contract fell by $4.33, o ...
Sunday, 16 April 23
CHEAPER SPOT LNG PRICES TEMPT SOME ASIAN BUYERS AMID SUPPLY GAINS - REUTERS
Cheaper spot prices for liquefied natural gas (LNG) are luring price-sensitive buyers back in Asia, with China and India recording rising imports i ...
Tuesday, 11 April 23
COAL USE CLIMBS WORLDWIDE DESPITE PROMISES TO SLASH IT - AAP
The burning of coal for electricity, cement, steel and other uses went up in 2022 despite global promises to phase down the fuel that is the bigges ...
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- Trasteel International SA, Italy
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Renaissance Capital - South Africa
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Transport, Egypt
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Romanian Commodities Exchange
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- The University of Queensland
- CNBM International Corporation - China
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Alfred C Toepfer International GmbH - Germany
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- McConnell Dowell - Australia
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Coal and Oil Company - UAE
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Price Waterhouse Coopers - Russia
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Gujarat Sidhee Cement - India
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