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Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would be the case, i.e. ordering more ships than the market needed to cater to demand. As a result, returns have plummeted, leaving many funds looking for a way out, most notably the dry bulk market, as tanker owners are still protected from the downturn. In its latest report, Gibson noted that “undoubtedly 2015 was a memorable year. For some a year to forget for tankers a year to enjoy. Whilst the misery has continued for many, tankers are still generating healthy returns a cross most sectors, in part aided by cheap bunker prices. However, sentiment, particularly in the tanker time charter market has certainly taken a hit as of late as the global economic outlook becomes increasingly bearish”.
According to Gibson’s analysis, global stock markets have witnessed a terrible start with the China led malaise wiping billions off investments across the globe, unsettling the nerves of many investors, which perhaps explains the loss of appetite for long term commitments. It may be the view of some wealth managers mantra that the economy remains on track but it is difficult for many to stay calm when your investments have dropped in value by 15 to 20 per cent since April 2015. Furthermore after the initial boost of low oil prices, much concern is now focused on the health of the major producers who have expensed vast sums of foreign cash reserves in the face of falling oil prices”.
The shipbroker also noted that “back in August 2014, we highlighted the growing role of private equity in the shipping sector as the involvement of major banks gradually faded from its peak in 2007. We speculated that at least $7 billion would come from this sector in 2014 which was still a drop in the ocean in their overall portfolios. Wilbur Ross estimated that private equity pumped $16 billion into shipping between 2008 and 2013 – two and a half times the amount generated through initial public offerings”.
Meanwhile, “whilst the tanker sector has so far escaped the horrors of dry cargo, there is no longer the hunger of investors to continue their involvement with shipping, as the overall performance of these investments has not fulfilled expectations and they are looking for a swift exit. We argued back in 2014 that the activity was being driven by “other people’s money “ without sufficient restraints which can result in over ordering and this has certainly been a factor. As a result of that activity, several larger private equity groups that invested in shipping in the past, have decided to cut their losses and sell. Investment funds and banks do not want to be shipowners, trying to sell off unwanted assets where the buyers have the upper hand”, Gibson said.
It went on to note “whilst many traditional shipping banks continue to wind down their shipping portfolios, other banks have signalled an intention to increase their presence in the sector with China’s CMB Financial Leasing looking to increase shipping and aviation from 12% of its existing book to 25-40%. This points towards conventional banks playing more of a role once again in ship finance, yet it may not be the traditional European banks fulfilling this role”.
Gibson said though, that “there is a great deal of pain at the moment but this will be seen by some shipowners in a positive light going forward, where realistic ship ping constraints return t o investment decisions, preventing the mass ordering of unwanted new buildings that we have seen from some of the recently funded players from private equity. There is no question that this scenario will put an enormous strain on shipyards who will need to be able to offer financing such as we have seen from Chinese banks and the Export credit agencies in other Asian shipbuilding nations. However their biggest problem is that the market has more than enough ships to meet demand and shipbuilders are struggling to fill their forward slots. This sort of market brings the cash buyer to the fore and there are clear signs that they are focusing in on the opportunities that are being presented. In the dry sector as prices plummet, the traditional second hand cash buyers are becoming increasingly visible. For now tanker owners remain very much protected by the continued healthy state of the market, but we should take nothing for granted as we will encounter more challenges as we progress through 2016”, the shipbroker concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Wednesday, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at t ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
Friday, 19 February 16
INDONESIAN HBA HITS A NEW LOWS BELOW $51 A TON AS OVERSUPPLY, LOW DEMAND WOES PERSIST
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016. HBA has slumped second time t ...
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- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Parliament of New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Thiess Contractors Indonesia
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Globalindo Alam Lestari - Indonesia
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- Central Java Power - Indonesia
- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Australian Coal Association
- Posco Energy - South Korea
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Madhucon Powers Ltd - India
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- VISA Power Limited - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Ambuja Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Global Green Power PLC Corporation, Philippines
- Merrill Lynch Commodities Europe
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Heidelberg Cement - Germany
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Commonwealth Bank - Australia
- Gujarat Mineral Development Corp Ltd - India
- Borneo Indobara - Indonesia
- Altura Mining Limited, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Petron Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Wilmar Investment Holdings
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
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