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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
- White Energy Company Limited
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Riau Bara Harum - Indonesia
- Eastern Coal Council - USA
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Jaiprakash Power Ventures ltd
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- Standard Chartered Bank - UAE
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Gujarat Mineral Development Corp Ltd - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Anglo American - United Kingdom
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Latin American Coal - Colombia
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Intertek Mineral Services - Indonesia
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- Romanian Commodities Exchange
- Australian Coal Association
- Tata Chemicals Ltd - India
- Price Waterhouse Coopers - Russia
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Metalloyd Limited - United Kingdom
- Carbofer General Trading SA - India
- Indian Oil Corporation Limited
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Antam Resourcindo - Indonesia
- Bhushan Steel Limited - India
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Aditya Birla Group - India
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Uttam Galva Steels Limited - India
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- Independent Power Producers Association of India
- Altura Mining Limited, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- SMC Global Power, Philippines
- Tamil Nadu electricity Board
- Minerals Council of Australia
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Siam City Cement - Thailand
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
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