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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, 08 January 23
ELEVATED COAL PRICE A DRAG ON MARGINS OF DOMESTIC BASE METAL PLAYERS: ICRA
The increased price of coal continue to be a drag on the margin of domestic base metal players with no immediate relief in sight, rating agency ICR ...
Monday, 02 January 23
CHINA’S COAL CONSUMPTION TO PEAK BY 2035: REPORT - REUTERS
China’s primary energy consumption is likely to peak at nearly 6.03 billion tonnes of standard coal between 2030 and 2035, refining giant Chi ...
Thursday, 29 December 22
INDIA'S COAL DEMAND LIKELY TO PEAK BETWEEN 2030-2035: MINISTER - ANI
The demand for coal in India will continue and is likely to peak between 2030-2035, Union Minister of Coal, Mines, and Parliamentary Affairs Pralha ...
Thursday, 29 December 22
RIO TINTO AND PARTNERS COULD RECEIVE AS MUCH AS $450M IN GOVERNMENT COMPENSATION FOR COAL PRICE CAP - THE GUARDIAN
Compensation payments for the Gladstone power plant remain the sticking point in the federal government’s coal price cap compensation negotia ...
Wednesday, 28 December 22
MARKET INSIGHT - INTERMODAL
The United Nations Conference on Trade and Development (UNCTAD) published a Global Trade Update on December 13th highlighting that global trade wou ...
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- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Toyota Tsusho Corporation, Japan
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Xindia Steels Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Karaikal Port Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Meenaskhi Energy Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Bukit Baiduri Energy - Indonesia
- IEA Clean Coal Centre - UK
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Siam City Cement - Thailand
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
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