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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, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Wilmar Investment Holdings
- Meralco Power Generation, Philippines
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- London Commodity Brokers - England
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- PTC India Limited - India
- Trasteel International SA, Italy
- Vizag Seaport Private Limited - India
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- ASAPP Information Group - India
- IHS Mccloskey Coal Group - USA
- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Carbofer General Trading SA - India
- Aditya Birla Group - India
- Kobexindo Tractors - Indoneisa
- Agrawal Coal Company - India
- Minerals Council of Australia
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Kumho Petrochemical, South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Parliament of New Zealand
- VISA Power Limited - India
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Global Coal Blending Company Limited - Australia
- South Luzon Thermal Energy Corporation
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Standard Chartered Bank - UAE
- Samtan Co., Ltd - South Korea
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- Attock Cement Pakistan Limited
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Planning Commission, India
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Thai Mozambique Logistica
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Makarim & Taira - Indonesia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Banpu Public Company Limited - Thailand
- Tata Chemicals Ltd - India
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Ministry of Finance - Indonesia
- Bangladesh Power Developement Board
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