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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, 26 January 23
AUSTRALIA'S CORONADO GLOBAL SEES COAL PRICES RISING ON RESUMING CHINA IMPORTS - REUTERS
Australia’s Coronado Global Resources said on Tuesday resuming metallurgical coal imports to China would likely push sea-borne coal prices hi ...
Monday, 23 January 23
CHINA'S MAJOR COAL-PRODUCING PROVINCE ACCELERATES DIGITAL TRANSFORMATION - XINHUA
At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-the-clock t ...
Monday, 23 January 23
CHINA'S COAL-RICH PROVINCE SEES COAL PRODUCTION INCREASE IN 2022 - XINHUA
North China’s coal-rich province of Shanxi saw its coal production hit 1.31 billion tonnes in 2022, up 8.7 percent year on year, local author ...
Wednesday, 18 January 23
MARKET INSIGHT - INTERMODAL
From Feb 5, another price cap will be introduced to Russian fuels and oil products, adding to the one for crude oil, already in place from Dec. 3. ...
Tuesday, 17 January 23
FRAUD IS THE BIGGEST THREAT TO CARGO LOSSES - TT CLUB
The almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within ...
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- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Kartika Selabumi Mining - Indonesia
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- White Energy Company Limited
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Neyveli Lignite Corporation Ltd, - India
- Jindal Steel & Power Ltd - India
- Simpson Spence & Young - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Essar Steel Hazira Ltd - India
- Australian Coal Association
- Ministry of Transport, Egypt
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Indika Energy - Indonesia
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Indogreen Group - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ASAPP Information Group - India
- Energy Development Corp, Philippines
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Carbofer General Trading SA - India
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Globalindo Alam Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- PTC India Limited - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Banpu Public Company Limited - Thailand
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Chamber of Mines of South Africa
- Kalimantan Lumbung Energi - Indonesia
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- MS Steel International - UAE
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Indonesian Coal Mining Association
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- The University of Queensland
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- South Luzon Thermal Energy Corporation
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