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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Energy Link Ltd, New Zealand
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Makarim & Taira - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Manunggal Multi Energi - Indonesia
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Jorong Barutama Greston.PT - Indonesia
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Central Electricity Authority - India
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Carbofer General Trading SA - India
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Bukit Makmur.PT - Indonesia
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Jindal Steel & Power Ltd - India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Videocon Industries ltd - India
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- CNBM International Corporation - China
- Indogreen Group - Indonesia
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