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, 30 September 20
MARKET INSIGHT - INTERMODAL
Spot rates for Capesize bulk carriers received a significant boost last week, however, there are certain reservations in the market regarding the p ...
Tuesday, 29 September 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.73 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.91 points Monday, up 0.73 percent week on week.
The index, released by China ...
Tuesday, 29 September 20
SHIPPING MARKET - ALLIED
Here we are, just a short breath before the final quarter of the year, and many are now debating to what extent we can really expect a firm dry bul ...
Tuesday, 29 September 20
INDONESIAN COAL COMPANIES' EARNINGS TO WEAKEN IN 2H20 - FITCH RATINGS
Rated Indonesian coal miners and contractors will have weaker operating and financial performances in the second half of 2020 than in the first, sa ...
Tuesday, 29 September 20
RUSSIA'S COAL PRODUCTION TO DROP BY 10.5% IN 2020, SAYS MINISTRY - TASS
Russia’s Economic Development Ministry projects a 10.5% decrease in coal production in the country in 2020 compared with last year to 395 mln ...
|
|
|
Showing 771 to 775 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Kideco Jaya Agung - Indonesia
- Singapore Mercantile Exchange
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Finance - Indonesia
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Aditya Birla Group - India
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Bhushan Steel Limited - India
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- London Commodity Brokers - England
- Kartika Selabumi Mining - Indonesia
- Renaissance Capital - South Africa
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Kaltim Prima Coal - Indonesia
- Attock Cement Pakistan Limited
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Maheswari Brothers Coal Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Sojitz Corporation - Japan
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- The University of Queensland
- Wilmar Investment Holdings
|
| |
| |
|
