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.
|
|
Friday, 21 August 20
BHP COMMITS TO SELLING ITS THERMAL COALMINES WITHIN TWO YEARS - THE GUARDIAN
Move follows pressure from investors but company stops short of full exit from coalmining
BHP has announced it plans to sell off its ...
Thursday, 20 August 20
MINER BHP CONFIRMS PLANS TO EXIT THERMAL COAL SECTOR - THE SYDNEY MORNING HERALD
The head of mining giant BHP has laid out plans for a reshaping of its global operations by seeking to quit thermal coal mining, offload some cokin ...
Thursday, 20 August 20
LONDON RETAINS ARBITER CROWN - BALTIC EXCHANGE | HFW
Fears that the UK’s decision to leave the European Union would dent the reputation of the nation’s capital as the leader in maritime ar ...
Wednesday, 19 August 20
U.S. COAL STOCKPILES STEADILY INCREASE AFTER REACHING LOWEST LEVEL IN A DECADE IN 2019 - EIA
After reaching their lowest level in more than a decade in March 2019, U.S. coal stockpiles steadily increased to 152 million tons in April 2020, r ...
Wednesday, 19 August 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.26 PCT - XINHUA
China Taiyuan coal transaction price index stood at 124.92 points Monday, down 0.26 percent week on week.
The index, released by Chi ...
|
|
|
Showing 821 to 825 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Iligan Light & Power Inc, Philippines
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- SMG Consultants - Indonesia
- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- Planning Commission, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- The University of Queensland
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Siam City Cement - Thailand
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- New Zealand Coal & Carbon
- CNBM International Corporation - China
- Australian Coal Association
- Maharashtra Electricity Regulatory Commission - India
- Deloitte Consulting - India
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Coalindo Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- PTC India Limited - India
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
|
| |
| |
|
