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.
|
|
Sunday, 30 August 20
PANAMAX - THIS WEEK THE DEMAND HAS PICKED UP, BUT THE TONNAGE LIST IS INCREASING DAY BY DAY - FEARNLEYS
Cape Size
More or less flat from previous week, with cape rates moving from US$ 19,500 to 18,900 on average. West Australia however being more ...
Saturday, 29 August 20
COAL INDIA'S FUEL SUPPLY TO POWER SECTOR DROPS ABOUT 20% IN APR-JUL: PTI
State-owned Coal India”s fuel supply to the power sector registered a decline of 19.5 per cent to 126.30 million tonnes (MT) in the April-Jul ...
Saturday, 29 August 20
SOUTH KOREAN BROKERAGE FIRM KOREA INVESTMENT & SECURITIES TO STOP ALL COAL BUSINESS - KOREA HERALD
South Korean brokerage firm Korea Investment & Securities has decided to stop its investments in coal, in line with the Moon Jae-in administrat ...
Thursday, 27 August 20
KOREAN GENCOS INVITED BIDS FOR TOTAL 985,000 TONS OF BITUMINOUS COAL FOR NOVEMBER 2020 LOADING
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) on behalf of EWP, KOSPO, KOSEP and KOWEPO has issued an international tender for total 985,000 ...
Thursday, 27 August 20
SOUTHEAST ASIAN NATIONS SET REGION-WIDE RENEWABLE ENERGY GOAL OF 23 PERCENT BY 2025 - ASEAN POST
The Association of Southeast Asian Nations (ASEAN) has set an ambitious target of securing 23 percent of its primary energy from renewable so ...
|
|
|
Showing 806 to 810 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- Wilmar Investment Holdings
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- SMC Global Power, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Orica Australia Pty. Ltd.
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Singapore Mercantile Exchange
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- Economic Council, Georgia
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- Power Finance Corporation Ltd., India
- Planning Commission, India
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Kartika Selabumi Mining - Indonesia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Aboitiz Power Corporation - Philippines
- Siam City Cement PLC, Thailand
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- GVK Power & Infra Limited - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Tata Chemicals Ltd - India
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Makarim & Taira - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Mercuria Energy - Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- ICICI Bank Limited - India
- Kideco Jaya Agung - Indonesia
|
| |
| |
|
