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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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Saturday, 18 February 23
PAKISTAN PLANS TO QUADRUPLE DOMESTIC COAL-FIRED POWER, MOVE AWAY FROM GAS - REUTERS
Pakistan plans to quadruple its domestic coal-fired capacity to reduce power generation costs and will not build new gas-fired plants in the coming ...
Saturday, 18 February 23
2023 MARINE FUEL MARKET PREDICTIONS - JOHN BERGMAN, AURAMARINE
The drive for decarbonisation we witnessed in 2022 has continued into 2023, demonstrating the shipping’s industry positive strides in the fas ...
Saturday, 28 January 23
COAL GROWTH BLIP NOT TO BE REPEATED - BALTIC EXCHANGE
As 2022 drew to a close, global coal demand looked set to end the year just 1.2% up on the previous year. But that small increase was enough to pus ...
Thursday, 26 January 23
CHINA'S COAL OUTPUT INCREASES IN DECEMBER 2022 - XINHUA
China’s raw coal output posted stable expansion in December 2022, official data showed.
The country produced 400 million tonne ...
Thursday, 26 January 23
COKING COAL NARROWS THE GAP ON THERMAL AS CHINA REOPENS - REUTERS
The premium of high-grade thermal coal over coking coal in Asia is shrinking as China’s re-opening and ending of a ban on imports from Austra ...
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- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Indian Oil Corporation Limited
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- India Bulls Power Limited - India
- Posco Energy - South Korea
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Metalloyd Limited - United Kingdom
- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- SN Aboitiz Power Inc, Philippines
- Planning Commission, India
- Mjunction Services Limited - India
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- Central Java Power - Indonesia
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- VISA Power Limited - India
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- GAC Shipping (India) Pvt Ltd
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- PTC India Limited - India
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
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