We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Wednesday, 19 August 20
MARKET INSIGHT - GEORGE LAIOS | INTERMODAL
 Since the Covid-19 outbreak, governments and central banks around the globe have been using their ammunition and stimulus packages to keep their economies running. Trillions have been injected into global economies to fight unemployment and minimize recession. Apart from the central banks of EU, Japan, Switzerland, Sweden and Denmark, who have been offering negative rates for the past five years – a handful of central banks have now reduced their policy rates to near-zero values. Regardless of how successful or not the above mentioned five banks’ “experiment’’ has been, negative rates have undoubtedly made hedging strategies more complicated.
When it comes to the US Dollar, the Fed Chair has made it clear that negative rates are not part of its policy tools for the time being and that it is highly unlikely that rates will be pushed below zero. However, the US President has openly expressed that he views such a tool favourably. Although market experts do not expect negative Libor rates in the imminent future, no one can rule out the possibility of this happening.
These developments have had numerous effects on shipping companies who typically borrow using USD-Libor floating loans. The first and obvious outcome of lower Libor is the reduced borrowing cost. Whilst average 3-month LIBOR rates were 0.69%, 0.74% and 0.95% during the 2009, 2016 and 2020 (to date) recessions respectively, the 3-month LIBOR rate in July closed at 0.3% and has decreased approximately 6-fold since January (0.25%, as of 17/8). USD Libor loans have a zero lower bound limit which is incorporated by banks in their loan documentation (LMA) language: if Libor is less than zero “it will be deemed to be zero’’. This wording is also included in proposed documentation by the Alternative Reference Rates Committee, who is responsible for the development of Libor’s successor.
Low interest rates have also resulted in increased enquiries from bank clients who want to exploit their interest rate hedging options. Most shipping borrowers have decided not to hedge owing to the consensus that USD interest rates will not increase significantly over the next couple of years. Nevertheless, the number of shipping companies (mainly listed) that have engaged in hedging derivatives remain significant.
Under “normal” circumstances, a Cap or a SWAP for protection against an upward movement of interest rates would be the norm. However, nowadays it is essential to provision for negative interest rates. The borrower who hedges should bear in mind that USD Libor can also turn negative. Some banks even “encourage” clients to include a Floor in their SWAPS which will prevent base rates on their loans from dropping below zero. This limits the extent to which their derivatives can fall “out of the money”. Such protection comes at a premium. Indicatively, a 5 year SWAP is priced at 0.37 %, while the cost of a Floor is [10-30] bps. With rates expected to remain close to zero, the SWAP protection premium will continue to rise for as long as there are statements in favour of negative rates such as that of President Trump. However, whether the cost of protecting of a company’s future cash flows through the xyz premium is high or not is also a matter of perception and is reflective of one’s risk profile.
By George Laios
Deputy CEO, Intermodal Group
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
Mr.George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 25 November 20
MARKET INSIGHT - INTERMODAL
Over 90% of the world’s goods are transported by sea. LPG is a clean, energy efficient and portable fuel that is being marketed at an afforda ...
Friday, 20 November 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 19 November 20
MARKET INSIGHT - INTERMODAL
As we are moving towards the end of the year, the overall deal landscape of the dry bulk sector corresponding to the second half of 2020 (up to dat ...
Tuesday, 17 November 20
COAL SQUEEZE INTENSIFIES - BALTIC EXCHANGE
The message from the top is clear: cut out coal. While the regulatory pressure has been evident for some time, the race to banish the black stuff s ...
Tuesday, 17 November 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.35 PCT - XINHUA
China Taiyuan coal transaction price index stood at 128.72 points Monday, up 0.35 percent week on week.
The index, released by China ...
|
|
|
Showing 731 to 735 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- ASAPP Information Group - India
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Eastern Coal Council - USA
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Aboitiz Power Corporation - Philippines
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parliament of New Zealand
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Attock Cement Pakistan Limited
- Makarim & Taira - Indonesia
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Chamber of Mines of South Africa
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Petron Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Renaissance Capital - South Africa
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Indo Tambangraya Megah - Indonesia
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Bhoruka Overseas - Indonesia
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Georgia Ports Authority, United States
- The University of Queensland
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Global Coal Blending Company Limited - Australia
- Madhucon Powers Ltd - India
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Goldman Sachs - Singapore
|
| |
| |
|
