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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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Friday, 22 June 12
COAL: THE BACKBONE OF MODERN ELECTRICITY - ECOAL
Coal has been described as the "forgotten fuel," perhaps because many aren't aware of the huge role it plays in powering the global econo ...
Thursday, 21 June 12
DRY BULK MARKET ON THE RISE AGAIN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market was on the rise once again yesterday, with the Baltic Dry Index (BDI), the industry’s benchmark, rising by 18 points, or 1 ...
Wednesday, 20 June 12
BDI MOVING HIGHER, PANAMAX AND SUPRAMAX VESSELS STRONGER, CAPESIZE RATES NEAR TO HISTORICAL LOWS OF DECEMBER 2008 - MARIA BERTZELETOU, HELLENIC SHIPPING
The dry market seems to follow the dynamic of the previous week with the Baltic Dry Index showing daily increases since June 8th, but is still stand ...
Tuesday, 19 June 12
SMALLER DRY BULK CARRIERS LIFT UP MARKET, PANAMAXES SET TO FALL SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Another rise for the dry bulk market was evident yesterday, as the industry’s benchmark, the BDI (Baltic Dry Index) was up for a ninth straigh ...
Sunday, 17 June 12
S7 & S8 ROUTES ARE LIKELY TO BE SOFT NEXT WEEK - VISTAAR
COALspot.com - The BDI gained some increase after continues fall for several weeks.
The BDI increased by 47 points (up by 5.36 pct) closing at 92 ...
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- The State Trading Corporation of India Ltd
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Coal and Oil Company - UAE
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Bangladesh Power Developement Board
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Independent Power Producers Association of India
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Ministry of Mines - Canada
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Grasim Industreis Ltd - India
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Sakthi Sugars Limited - India
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- PTC India Limited - India
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- India Bulls Power Limited - India
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Altura Mining Limited, Indonesia
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Aditya Birla Group - India
- Bulk Trading Sa - Switzerland
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Chettinad Cement Corporation Ltd - India
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Australian Coal Association
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Kobexindo Tractors - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Cement Manufacturers Association - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Posco Energy - South Korea
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Coastal Gujarat Power Limited - India
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