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Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order is a hard decision nowadays for most ship owners, despite the fact that newbuilding prices are close to their lowest price levels in two decades. Despite this incentive, ship owners have to consider additional factors, such as financing, market conditions and of course freight rates. If they are low, then it’s hard to consider a newbuilding order, since the return on investment will most likely be low, making it more difficult to secure and ultimately paying off a bank loan to finance the newbuilding investment.
In a recent report, Intermodal, aknowledging the fact that timing is crucial in a strongly cyclical and capital intensive market, such as international shipping, examined the case of Kamsarmax dry bulk carriers. In his report, Intermodal’s Panos Tsilingiris, said that for the purpose of the exercise, Intemodal assumed that contracting takes place today and delivery is scheduled after about two years. Furthermore, “the vessel is operated is operated by the buyer for 10 full years (including her second SS/DD) and is sold thereafter. The residual sale price is the resale price of the vessel depreciated over 10 years at 5% p.a. We accept newbuilding prices of $ 26.5 million basis 30/70 payment terms plus $ 500k pre-delivery expenses. With regards to financing, we suppose 60% loan with a fixed interest rate of 5% and 25% balloon, and arrangement/commitment costs of approximately 1.5% of the loan facility. The remaining 40% is financed via equity at 12% p.a. The Opex costs begin with xs $ 6,000/day and are subject to a 2.5% annual appreciation, while we also factor in indicative dry-docking costs. Assuming 365 OPEX days and 350 TC days, the resulting break-even TC rate for the 10-year period is $ 15,959/day” said Tsilingiris.
He added that “at first sight, the above figure may not enthuse speculators when compared to the current freight market in which Kamsarmax bulkers struggle to achieve double-digit yearly TC rates. However, the seasoned shipowner will recognize that this figure is well below the 20-year average, the 10-year average, and the 10-year average after excluding the 2007-2008 bubble years.
Further to the attractive break-even point, the driving force for newbuildings is the high price of bunkers; the ‘eco-type’ designs with their promised (yet generally unproven so far) increased energy efficiency appear tempting to both owners and charterers. Owners might prefer newbuildings over second-hand tonnage since they do not expect a radical peak-up in the dry bulk freight markets during 2012-2013. Moreover, the long operating life of a newbuilding provides some encouragement, if not statistical certainty, that the market will peak up at least once during the vessel’s operating life. There is hope that due to the significantly slower recent contracting of bulker newbuildings and assuming no collapse in demand, the market will return to healthy levels within 2015. Of course, massive orders, something not expected in the short-term given the current market, the tight financing and the global economic uncertainty, would negate any benefit from the lower break-even point of such investments” he said.
As a result, the report from Intermodal concludes that “while the exact figures depend upon the idiosyncrasies of the specific project and ship-owner as well as market conditions (LIBOR, actual TC rates, residual value, etc.), we have shown how the low entrance point for newbuildings renders attractive the break-even rate of such investments. In conclusion, as low shipbuilding prices gradually concur with the maturing of eco-type designs, newbuilding investments appear increasingly attractive” it said.
Source: Nikos Roussanoglou, Hellenic Shipping
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Wednesday, 18 July 12
SHIP PRICES HAVE FALLEN RAPIDLY THIS YEAR, FAVORING INVESTORS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The price for a 5 year old Capesize dry bulk carrier of 172,000 dwt has fallen to about $33,4mil from $42.9 at the end of June 2011, while at end of ...
Saturday, 14 July 12
FREIGHT MARKET SEEMS TO BE QUITE VOLATILE - VISTAAR
COALspot.com - The market seems to be quite volatile with the trend changing almost every week. This week all the segments were down except for Pana ...
Friday, 13 July 12
TRANSCOAL MINERGY HAS RECEIVED PMA STATUS IN INDONESIA
COALspot.com - PT Transcoal Minergy (“TCM”) has received official foreign owned company status from the Capital Investment Coordinating ...
Thursday, 12 July 12
LACK OF CAPESIZE DEMAND DRAGS DRY BULK MARKET LOWER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
A lack of demand for the larger Capesize dry bulk carriers had as a result the fall of the industry’s benchmark, the BDI (Baltic Dry Index), w ...
Thursday, 12 July 12
RIO TINTO'S SENIOR MANAGEMENT CHANGES
COALspot.com - Rio Tinto is making changes to its senior management team as chief financial officer (CFO) Guy Elliott has decided to retire at the e ...
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- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Parry Sugars Refinery, India
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Directorate Of Revenue Intelligence - India
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- IHS Mccloskey Coal Group - USA
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- Australian Coal Association
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Transport, Egypt
- Anglo American - United Kingdom
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- PTC India Limited - India
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Tamil Nadu electricity Board
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Mintek Dendrill Indonesia
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Mines - Canada
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Coastal Gujarat Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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