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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, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
Tuesday, 12 June 12
ITACHA RESOURCES BUYS SARANA MARINE - INSIDER STORIES
Insider Stories reported that, coal mining company PT Itacha Resources, a joint venture between Anthoni Salim and Glenn Yusuf, announced that Itacha ...
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- PTC India Limited - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Global Business Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Ambuja Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Larsen & Toubro Limited - India
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Deloitte Consulting - India
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- Meralco Power Generation, Philippines
- Indogreen Group - Indonesia
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Semirara Mining Corp, Philippines
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Xindia Steels Limited - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Formosa Plastics Group - Taiwan
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Riau Bara Harum - Indonesia
- Star Paper Mills Limited - India
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Toyota Tsusho Corporation, Japan
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Binh Thuan Hamico - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Petrochimia International Co. Ltd.- Taiwan
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Indian Oil Corporation Limited
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Indika Energy - Indonesia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Baramulti Group, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Central Java Power - Indonesia
- Gujarat Sidhee Cement - India
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Mjunction Services Limited - India
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Heidelberg Cement - Germany
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
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