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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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Friday, 12 February 16
COAL PRICES ARE EXPECTED TO DECLINE 13% IN 2016 TO $50 ATON, ON CONTINUED WEAK DEMAND AND OVERSUPPLY - WORLD BANK
COALspot.com: Thermal coal prices fell 9 percent in the fourth quarter on continued weak demand, high stocks, and surplus production, World Bank sa ...
Friday, 12 February 16
U.S. COAL PRODUCTION OFF 5.4% FROM LAST WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 12.9 million shor ...
Thursday, 11 February 16
GLOBAL NEWBUILDING ORDERBOOK IS SHRINKING ON A DAILY BASIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
2016 has started right where 2015 left off when it comes to newbuilding ordering activity, i.e. there are slim pickings to be had from shipyards ar ...
Wednesday, 10 February 16
SOUTH AFRICA IS HOPING TO SHIP MORE COAL TO INDIA IN 2016
COALspot.com: South Africa is hoping to boost coal exports to India after shipping a record 75.4 million tonnes of coal in 2015, industry officials ...
Wednesday, 10 February 16
OWNERS APPEAR WILLING TO DISPOSE OF TONNAGE THE SOONEST IT HITS THE 10 YEAR MARK - TIMOS PAPADIMITRIOU
COALspot.com: The last two months of 2015 made a case for traditional shipowners to invest in the dry bulk sector, doing so though based purely on ...
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- Banpu Public Company Limited - Thailand
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- White Energy Company Limited
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- AsiaOL BioFuels Corp., Philippines
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Port Waratah Coal Services - Australia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Carbofer General Trading SA - India
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- Manunggal Multi Energi - Indonesia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Baramulti Group, Indonesia
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- Australian Coal Association
- Mercuria Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- India Bulls Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Planning Commission, India
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Anglo American - United Kingdom
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Tata Chemicals Ltd - India
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- The University of Queensland
- Meralco Power Generation, Philippines
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
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