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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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Thursday, 12 July 12
SOUTHGOBI RESOURCES ANNOUNCES NOTICE OF INVESTMENT DISPUTE FILED AGAINST MONGOLIAN GOVERNMENT
Press Release - SouthGobi Resources Ltd. (TSX: SGQ, HK: 1878) (“SouthGobi”) announced today that SGQ Coal Investment Pte. Ltd., a wholly ...
Wednesday, 11 July 12
HBA DROPPED SHARPLY IN JULY
COALspot.com - Indonesian HBA fell to lowest level since September 2010 in July 2012. The monthly coal reference price for coal sales this mon ...
Wednesday, 11 July 12
SUB-BIT FOB INDONESIA COAL SWAP LOST $ 1.26 PER TON
COALspot.com - Sub-Bit FOB Indonesia Coal decline for a second day yesterday, according to SGX AsiaClear OTC Coal Swaps. The prices for shipments to ...
Tuesday, 10 July 12
DRY BULK MARKET RECORDS MODEST GAINS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher on Monday, with the Baltic Dry Index (BDI) ending the session up by 5 points to 1,162. Most markets were hig ...
Saturday, 07 July 12
INDONESIA-JAPAN RELATIONS TURN SOUR - THE JAKARTA POST
The Jakarta Post, the one of the leading Indonesian English new papers reported that, Bilateral relations between Indonesia and Japan have recently ...
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- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Minerals Council of Australia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Kapuas Tunggal Persada - Indonesia
- Attock Cement Pakistan Limited
- Sarangani Energy Corporation, Philippines
- Uttam Galva Steels Limited - India
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Kideco Jaya Agung - Indonesia
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Singapore Mercantile Exchange
- ASAPP Information Group - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- The Treasury - Australian Government
- PTC India Limited - India
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Rio Tinto Coal - Australia
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Kobexindo Tractors - Indoneisa
- Oldendorff Carriers - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- Sindya Power Generating Company Private Ltd
- Cement Manufacturers Association - India
- Formosa Plastics Group - Taiwan
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- South Luzon Thermal Energy Corporation
- Marubeni Corporation - India
- The University of Queensland
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
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