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