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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, 11 June 12
BAHANA FORECASTS THE COAL PRICES WILL FALL FURTHER
COALspot.com - Growing US coal supplies + low shipping costs = Asia as target.
According to Irwan Budiarto analyst at Bahana Securities, US ...
Monday, 11 June 12
ASIAN COAL TRADING COMMUNITY EMBRACES API 5 AND API 8
Press Release - The Asian coal trading community is embracing the API 5 and API 8 indexes for its swap contracts.
The API 5 index represents 5,50 ...
Sunday, 10 June 12
FREIGHT MARKET EXPECTED TO REMAIN WEAK FOR NEXT FEW WEEKS - VISTAAR
COALspot.com - The BDI continued to fall this week and down by 2.99 pct closing at 877 points.
The Cape index also was down by 5.78 pct closing a ...
Friday, 08 June 12
ESSAR ENERGY RECEIVES FINAL APPROVAL FOR INDONESIAN COAL BLOCK
COALspot.com - Essar Energy plc, the India-focused integrated energy company, today announced that it has received final ‘Pinjam Pakai’ ...
Friday, 08 June 12
MINISTER DENIES COAL EXPORT TAX PLAN, ENDORSES RESTRICTIONS - THE JAKARTA POST
The Jakarta post, one of the leading english news paper in Indonesia reported that, Energy and Mineral Resources Minister Jero Wacik has denied that ...
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- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Anglo American - United Kingdom
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Minerals Council of Australia
- Altura Mining Limited, Indonesia
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Formosa Plastics Group - Taiwan
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Planning Commission, India
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Global Coal Blending Company Limited - Australia
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Deloitte Consulting - India
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
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