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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, 05 July 12
BUMI ACHIEVES HIGHER SELLING PRICE IN FIRST QUARTER
COALspot.com - PT Bumi Resources Tbk (BUMI), Indonesia's largest coal producer and exporter, has successfully maintained a higher sales margin, des ...
Tuesday, 03 July 12
DRY BULK MARKET INCHED FORWARD AT THE START OF THE WEEK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched forward at the beginning of the new week, prior to the US holidays regarding the celebration of the 4th of July, which is ...
Monday, 02 July 12
ORPHEUS STRENGTHENS REVENUE STREAM WITH NEW ROYALTY AGREEMENT AT THE B2 COAL PROJECT
Orpheus Energy (ASX:OEG) is pleased to advise that it has executed a life of mine Royalty Agreement with Indonesian mining contractor PT Debbia Mini ...
Monday, 02 July 12
DRY BULK DEMAND TO RISE TO 3.6 BILLION TONNES IN 2012, BUT NEW BUILDING DELIVERIES ARE
In its latest analysis on the dry bulk market fundamentals, DVB Bank said that dry bulk cargo demand is forecast to rise to approximately 3.6 billio ...
Sunday, 01 July 12
AUSTRALIAS CARBON TAX - SUNIL K KUMBHAT
COALspot.com - Climate Change
Climate change and global warming have now become buzzwords the world over. The disastrous consequences for global ...
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- Meralco Power Generation, Philippines
- OPG Power Generation Pvt Ltd - India
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Maharashtra Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Agrawal Coal Company - India
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- The University of Queensland
- Wilmar Investment Holdings
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Indonesian Coal Mining Association
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- McConnell Dowell - Australia
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Metalloyd Limited - United Kingdom
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Central Electricity Authority - India
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Vedanta Resources Plc - India
- PTC India Limited - India
- Economic Council, Georgia
- Ministry of Transport, Egypt
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Mercator Lines Limited - India
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