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, 19 August 20
COAL INDIA TRADE UNIONS DEFER DAY-LONG STRIKE: PTI
The unions had decided to go on strike against the commercial mining and the proposed divestment or buyback of shares of Coal India Ltd (CIL).
...
Wednesday, 19 August 20
MISC MARKS ITS MAIDEN FORAY INTO MAJOR DEEP-WATER PROJECT IN LATIN AMERICA WITH MERO 3 FPSO
MISC Berhad (MISC) is pleased to announce its acceptance of Letter of Intent (LOI) from Petróleo Brasileiro S.A. (Petrobras) for the provisi ...
Wednesday, 19 August 20
INDIA SAW A SHARP DECLINE IN ENERGY COAL IMPORTS IN JANUARY - JUNE 2020; –27 PER CENT YOY - BHP
Energy coal prices were weak in the second half of financial year 2020, BHP says in its Economic and Commodity Outlook FY20.
Accordi ...
Wednesday, 19 August 20
COAL PRICES TO REMAIN SUBDUED THIS FISCAL AMID WEAK DEMAND, HIGH INVENTORY - THE HINDU BUSINESS LINE
Coal offtake is improving gradually as lockdown eases
Coal prices are expected to remain subdued to weak demand and high inventory l ...
Tuesday, 18 August 20
BLACKBALLED: WILL COAL BOUNCE BACK FROM SLUMP OR IS IT TERMINAL? - SYDNEY MORNING HERALD
Even by the standards of this miserable year, 2020 has been a shocker for the global coal industry.
As the lockdown kicked in demand ...
|
|
|
Showing 826 to 830 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Australian Coal Association
- Trasteel International SA, Italy
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kepco SPC Power Corporation, Philippines
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Semirara Mining Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- Central Java Power - Indonesia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sakthi Sugars Limited - India
- Eastern Coal Council - USA
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Minerals Council of Australia
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- The Treasury - Australian Government
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Bhushan Steel Limited - India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Wood Mackenzie - Singapore
- Barasentosa Lestari - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Simpson Spence & Young - Indonesia
- Xindia Steels Limited - India
- Meralco Power Generation, Philippines
- Carbofer General Trading SA - India
- White Energy Company Limited
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Commonwealth Bank - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- ASAPP Information Group - India
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Meenaskhi Energy Private Limited - India
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Jaiprakash Power Ventures ltd
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Global Business Power Corporation, Philippines
- Ministry of Finance - Indonesia
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Attock Cement Pakistan Limited
- Mjunction Services Limited - India
- Toyota Tsusho Corporation, Japan
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Eastern Energy - Thailand
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Sree Jayajothi Cements Limited - India
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Metalloyd Limited - United Kingdom
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Bhatia International Limited - India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- SMG Consultants - Indonesia
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- San Jose City I Power Corp, Philippines
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- LBH Netherlands Bv - Netherlands
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
|
| |
| |
|
