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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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Thursday, 02 March 23
DRY BULK MARKET: THE WAY CHINA GOES, SO GOES THE MARKET - BIMCO
We expect demand growth within the 1.5-2.5% range in 2023, driven by China’s economic recovery. Improvements in consumer sentiment should hel ...
Thursday, 02 March 23
INDIA, CHINA DEMAND BOOST LOW-RANK THERMAL COAL PRICES IN ASIA - RUSSELL, REUTERS
Signs of stronger import demand from India have arrested the decline in price of the thermal coal grades most commonly sought by the world’s ...
Thursday, 02 March 23
INDIA CHEERS THE RETURN OF ‘KING COAL’ AS INDUSTRY SEES BUOYANT FUTURE - REUTERS
India’s coal industry celebrated the return of its major conference after a three-year pandemic hiatus by presenting a bullish view of demand ...
Wednesday, 01 March 23
GEO CONNECT ASIA RETURNS IN MARCH TO ACCELERATE THE REGION’S GEOSPATIAL AND LOCATION INTELLIGENCE CAPABILITIES
Press Release: The third edition of GCA will be held in conjunction with Digital Construction Asia and the inaugural Drones Asia – an event d ...
Wednesday, 01 March 23
THE DECLINE IN THE COAL PRICE SINCE THE BEGINNING OF THE YEAR HAS BEEN SIGNIFICANT - INTERMODAL
Last week, the front-month API2 future rose by 3.5%, but since the beginning of the year the future has fallen by 39% to $136.65/t, while the Newca ...
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- Mjunction Services Limited - India
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- The University of Queensland
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Riau Bara Harum - Indonesia
- Australian Coal Association
- Renaissance Capital - South Africa
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Manunggal Multi Energi - Indonesia
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- The State Trading Corporation of India Ltd
- Electricity Generating Authority of Thailand
- European Bulk Services B.V. - Netherlands
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Minerals Council of Australia
- Africa Commodities Group - South Africa
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Parliament of New Zealand
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Indo Tambangraya Megah - Indonesia
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Kohat Cement Company Ltd. - Pakistan
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Planning Commission, India
- Jaiprakash Power Ventures ltd
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Videocon Industries ltd - India
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Global Business Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- OPG Power Generation Pvt Ltd - India
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- PTC India Limited - India
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- Posco Energy - South Korea
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- Marubeni Corporation - India
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