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.
|
|
Thursday, 09 November 23
GREEK AND CHINESE COMPANIES OWN 34% OF THE GLOBAL FLEET’S CARGO CAPACITY - BIMCO
“The global fleet of cargo carrying ships consists of around 61,000 ships with a deadweight capacity of about 2,200 million tonnes. The ships ...
Monday, 23 October 23
CHINA SEPT COAL OUTPUT HITS SIX-MONTH HIGH ON RISING POWER DEMAND - REUTERS
China’s September coal output rose 0.4% from August to the highest level since March, official data showed on Wednesday, on rising power dema ...
Monday, 23 October 23
INDIA COAL INVENTORIES DROP AT FASTEST PACE IN TWO YEARS, BOOSTING IMPORTS - REUTERS
Coal inventories at Indian power plants in the first half of October fell at their fastest rate in two years, an analysis of government data showed ...
Tuesday, 19 September 23
LNG SHIPPING STOCKS: THE ASIAN GROWTH UP-INDICES
Last week, the UP World LNG Shipping Index (UPI) gained 3.81 points or 2.51%, closing at 155.85 points. This index tracks the performance of LNG sh ...
Sunday, 10 September 23
GOLDMAN SACHS PREDICTS OIL PRICE TO HIT $100 ON OPEC CUTS - YAHOO FINANCE
Oil supply cuts by Saudi Arabia and Russia could lead to Brent crude jumping as high as $107 a barrel in 2024, Goldman Sachs Commodities Research h ...
|
|
|
Showing 81 to 85 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Salva Resources Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Goldman Sachs - Singapore
- Ambuja Cements Ltd - India
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- Central Electricity Authority - India
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Tata Chemicals Ltd - India
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Independent Power Producers Association of India
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Chamber of Mines of South Africa
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Ceylon Electricity Board - Sri Lanka
- Medco Energi Mining Internasional
- The University of Queensland
- Star Paper Mills Limited - India
- Sical Logistics Limited - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- SMC Global Power, Philippines
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Wilmar Investment Holdings
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Dalmia Cement Bharat India
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Energy Development Corp, Philippines
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- White Energy Company Limited
- Minerals Council of Australia
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- CNBM International Corporation - China
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
|
| |
| |
|
