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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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Saturday, 07 July 12
EXCESS SUPPLY & WEAK DEMAND KEEP COAL PRICES LOW
COALspot.com - SGX AsiaClear OTC Coal Swaps for August and Q4 deliveries slipped slightly this week. SGX’s Indonesian sub-bituminous coal swap ...
Saturday, 07 July 12
BALTIC INDEX UP ON STRONG CAPE, PANAMAX RATES - VISTAAR
COALspot.com - This week all the segments were firmed up with BDI up by 15.23 pct (up by 153 points) closing at 1,157 points.
The cape index also ...
Saturday, 07 July 12
DRY BULK MARKET NOT ABLE TO FIND SOLID GROUND SAY EXPERTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the second half of each, traditionally looking the most active one, especially in terms of newbuildings being delivered, it's highly unlikely ...
Thursday, 05 July 12
GOVT GETS READY FOR $1.8B SUIT - THE JAKARTA POST
The Jakarta Post, one of the leading Indonesian English new papers reported that, several ministries and the Attorney General’s Office held a ...
Thursday, 05 July 12
DRY BULK MARKET MOVES FURTHER UP THE HILL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its growth momentum by the middle of the week, as the BDI (Baltic Dry Index) rose by an additional 40 points to 1,103 p ...
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- MS Steel International - UAE
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Leighton Contractors Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Straits Asia Resources Limited - Singapore
- South Luzon Thermal Energy Corporation
- Holcim Trading Pte Ltd - Singapore
- Kepco SPC Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Bhatia International Limited - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Madhucon Powers Ltd - India
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Marubeni Corporation - India
- SN Aboitiz Power Inc, Philippines
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- Wood Mackenzie - Singapore
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- Kalimantan Lumbung Energi - Indonesia
- Bukit Makmur.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Tata Chemicals Ltd - India
- Bangladesh Power Developement Board
- Therma Luzon, Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Electricity Authority, New Zealand
- Kaltim Prima Coal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Lanco Infratech Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Trasteel International SA, Italy
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Indian Energy Exchange, India
- Asmin Koalindo Tuhup - Indonesia
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- PowerSource Philippines DevCo
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
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