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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, 17 February 16
THE OWNERS FACING HISTORICAL LOW DRY BULK RATES; COAL IMPORTS TO CHINA IS STILL POINTING TO A STRONG TREND OF DECLINING CONSUMPTION
The sharp fall in dry bulk rates that has been taking place since the end of last year and has left owners facing historical low rates for a substa ...
Monday, 15 February 16
CALL THE DOCTOR! SHIPPING'S MEDICAL DRAMA UNFOLDS......- CLARKSONS
The recycling market has started 2016 with a bang, with a huge volume of tonnage heading to demolition facilities. Many of the key shipping markets ...
Monday, 15 February 16
CS 42 COAL INDEX ROSE 0.07% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.15 percent week over week to averaging $38.96 per ton on this past Friday, ...
Monday, 15 February 16
BALTIC INDEX MARGINALLY ROSE BY A POINT D-D; CAPESIZE INDEX DOWN 13 POINTS W-W; PANAMAX INDEX UP 29 POINTS W-W
COALspot.com: The freight markets continued to fall this past week.
The BDI, The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measu ...
Friday, 12 February 16
DRY BULK MARKET'S FORTUNES STILL TIED WITH CHINA'S ECONOMY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The inevitable slowdown of the Chinese economy was expected to hurt dry bulk shipping, but few expected the blow to be this hard, especially given ...
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- Petron Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Maheswari Brothers Coal Limited - India
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Central Java Power - Indonesia
- Sakthi Sugars Limited - India
- Coastal Gujarat Power Limited - India
- Global Business Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Bhushan Steel Limited - India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Borneo Indobara - Indonesia
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- PTC India Limited - India
- Tata Chemicals Ltd - India
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- Maharashtra Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Wilmar Investment Holdings
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Ministry of Mines - Canada
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Economic Council, Georgia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- India Bulls Power Limited - India
- Australian Coal Association
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Orica Mining Services - Indonesia
- London Commodity Brokers - England
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- TNB Fuel Sdn Bhd - Malaysia
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Merrill Lynch Commodities Europe
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Parry Sugars Refinery, India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- GVK Power & Infra Limited - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Banpu Public Company Limited - Thailand
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
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