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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, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- Cement Manufacturers Association - India
- Energy Development Corp, Philippines
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Interocean Group of Companies - India
- VISA Power Limited - India
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Indika Energy - Indonesia
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Global Business Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Eastern Energy - Thailand
- The University of Queensland
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Jindal Steel & Power Ltd - India
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kepco SPC Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Meenaskhi Energy Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Rashtriya Ispat Nigam Limited - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Deloitte Consulting - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- SN Aboitiz Power Inc, Philippines
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- South Luzon Thermal Energy Corporation
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Sarangani Energy Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Bhatia International Limited - India
- PTC India Limited - India
- Kobexindo Tractors - Indoneisa
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Mjunction Services Limited - India
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
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