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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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Monday, 25 June 12
RIO TINTO MAKES FIRST COAL SHIPMENT FROM MOZAMBIQUE
Rio Tinto has started exporting premium hard coking coal from its Benga Mine in the Moatize Basin in Mozambique. The first shipment of 34,000 tonnes ...
Sunday, 24 June 12
SUPRAMAX FREIGHT MARKET FIRMED UP FROM INDONESIA TO INDIA - VISTAAR
COALspot.com - This week all the segments gained and marked was firm in the Supramax and Handy size sector, where as the Cape and Panamax inde ...
Saturday, 23 June 12
COAL PRICES APPETITE FOR ROLLER-COASTER RIDES
COALspot.com - SGX AsiaClear OTC Coal Swaps have suffered something of a roller-coaster ride in terms of prices during this week. SGX’s Indone ...
Friday, 22 June 12
PRESENT SPOT WEAKNESS IS TEMPORARY, SEASONAL AND RISE AS WINTER APPROACHES - BUMI
COALspot.com - PT Bumi Resources Tbk, the world’s one of the largest coal producer and Indonesia’s largest multi grade coal miner has no ...
Friday, 22 June 12
GLOBAL ACTION NEEDED ON ENERGY POVERTY - WORLD COAL
Eradicating energy poverty is possibly the biggest challenge facing the world today. Like climate change it can only be addressed with a concerted g ...
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- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Alfred C Toepfer International GmbH - Germany
- Merrill Lynch Commodities Europe
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Kohat Cement Company Ltd. - Pakistan
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Siam City Cement PLC, Thailand
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Sical Logistics Limited - India
- Australian Coal Association
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Indian Oil Corporation Limited
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- The University of Queensland
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- White Energy Company Limited
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Dalmia Cement Bharat India
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Indian Energy Exchange, India
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Mercuria Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Singapore Mercantile Exchange
- VISA Power Limited - India
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Mintek Dendrill Indonesia
- Bukit Baiduri Energy - Indonesia
- Latin American Coal - Colombia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Ministry of Mines - Canada
- Chamber of Mines of South Africa
- Kapuas Tunggal Persada - Indonesia
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- Economic Council, Georgia
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- PTC India Limited - India
- Price Waterhouse Coopers - Russia
- Coastal Gujarat Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Commonwealth Bank - Australia
- Parliament of New Zealand
- Central Electricity Authority - India
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- GN Power Mariveles Coal Plant, Philippines
- ASAPP Information Group - India
- Oldendorff Carriers - Singapore
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Bangladesh Power Developement Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
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