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Thursday, 07 July 16
CONSOLIDATION TO RULE OVER SHIPPING, AS EXECUTIVES SEEK INVESTMENT OPPORTUNITIES IN CHINA, INDIA AND EUROPE SAYS NORTON ROSE SURVEY
 The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead Transport survey from global law firm Norton Rose Fulbright. China and India are the most popular jurisdictions for investment, followed by the US, with growth through consolidation viewed as the best investment opportunity currently. While confidence among respondents from the aviation and rail industries is high, owing to lower oil prices, the availability of funding and the impact of infrastructure improvements, the shipping industry remains the least optimistic as a result of overcapacity in many subsectors of the market.
Over half (52%) of all respondents to the Norton Rose Fulbright survey agree that a global recession poses the greatest threat to their industry. However, despite political uncertainty, most agree that the transport sector can expect to enjoy further growth over the next five years. Rising passenger numbers and freight volumes are anticipated (by 73%) and an increase in the number of routes and services is expected (52%).
Investment in technology is expected to rise, according to 67%, with low carbon technology and predictive analytics expected to represent the most significant driver of change in the transport sector over the next five years.
Infrastructure remains a key theme for the sector. After consolidation, infrastructure improvements are viewed as the best investment opportunity currently (by 19%), and infrastructure investment is seen as the most helpful form of government support (by 25%). For the aviation, rail and road industries, inadequate infrastructure is seen as the greatest challenge to the operational efficiency of their industries.
Bank debt, capital markets and private equity will represent transport businesses’ main sources of funding over the next two years, and 74% of respondents expect the availability of funds to stay the same, or even increase, over the next five years.
Harry Theochari, global head of transport at Norton Rose Fulbright, comments:
“The transport sector is continuing to look to Asia Pacific for investment opportunities, encouraged by rising demand and China’s ambitious Belt and Road initiative, a modern day silk road which will improve China’s infrastructure links with the rest of the world.
“Sentiment is high in the aviation and rail industries, buoyed by the expectation of increased passenger numbers. However, shipping continues to feel the effects of overcapacity in many markets, and an increase in enforcement actions is widely predicted, although in the longer term respondents believe conditions will improve.
“Investment in infrastructure and technology, and consolidation through both M&A and joint ventures, will be key drivers for transforming the transport sector and assisting growth.
“The adoption of new technology in particular will help to address numerous issues the sector has been grappling with in recent years, such as low carbon technology to meet increasingly stringent environmental legislation, and predictive analytics to anticipate repairs and maintenance and better understand and forecast consumer behavior.
“While respondents are most fearful of the impact of a worldwide recession, they will be watching closely the implications of the UK’s referendum result. The transport sector is international and highly regulated and any UK exit from the EU would need to take into account a number of complex issues.”
Shipping
Shipping is the least optimistic industry within the transport sector, by a significant margin. Only 15% believe that current market conditions are positive, down from 33% in 2015 and 69% in 2014.
Overcapacity is the principal reason given for this lack of optimism (66%), followed, to a lesser extent, by economic uncertainty in key markets (27%).
Respondents are more optimistic when asked to consider the outlook for shipping over the next five years. Fares and freight costs will increase according to 67% and the same proportion anticipate an upturn in passenger numbers and freight volumes. The number of routes and services offered is also expected to rise, according to 35%. However, just 22% believe that funding will become more readily available and 64% think that the number of enforcement actions will increase as lenders seek to protect their positions and recover losses. Most (68%) expect fuel costs to rise.
Investment opportunities
Much of the shipping industry (58%) continues to favour Asia Pacific for investment opportunities over the next two to five years, followed, to a far lesser extent, by Europe (16%). China (17%) and India (16%) remain the most popular markets for investment.
A merger or acquisition is seen as the optimal investment opportunity (by 34%, up from 29% in 2015), while 13% favour joint ventures, alliances and pools (down from 28% in 2015).
Respondents expect consolidation to be at the centre of shipping businesses’ strategies over the next 12 months, either in the form of M&A (22%) or joint ventures (19%), while 22% expect a focus on the disposal of non-core assets. Almost three-quarters (72%) expect investment in technology to increase over the next five years, with low carbon technology expected to have the most significant impact on the industry during this period (by 33%), followed by predictive analytics (by 24%).
Regulation
Almost half (42%) believe that greater transparency in the application and enforcement of existing and proposed regulations would be the most helpful form of government support for the shipping industry, more so than fiscal incentives (32%) or investment in infrastructure (29%). Environmental regulation is seen as the regulation that has had the greatest impact on shipping over the past decade (by 49%), followed by trade and financial sanctions (by 25%).
Supply and demand imbalances are seen as the greatest challenge to the operational efficiency of the industry (by 47%), followed by a lack of qualified people (12%) and emission controls (9%). A global recession is seen as the greatest threat to the health of shipping over the next five years (by 68%). To a lesser extent, respondents are also concerned about the impact of enforcement by creditors on debt obligations (12%) and continued political and economic uncertainty in the Eurozone (8%).
Bank debt is once again expected to act as shipping’s primary source of funding over the next two years (22%), followed by shareholder support (18%) and private equity (16%).
Despite the problem of overcapacity in many sub-sectors of the industry, fuelled by new build vessels coming on to the market, 11% think that ECA funding will be the industry’s main
source of finance.
Source: Norton Rose Fulbright | Hellenic Shipping
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Friday, 13 May 16
COAL CARGOES - SOME RECENT DEVELOPMENTS: SWEDISH CLUB
KNOWLEDGE TO ELEVATE
Indonesia continues to be amongst the world’s major exporters of coal, some 426Mt being traded in 2013 mostly to In ...
Friday, 13 May 16
US WEEKLY COAL PRODUCTION IS RUNNING 33% BELOW THE SAME PERIOD IN 2015 - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.9 million short tons (mm ...
Friday, 13 May 16
DRY BULK SHIPPING MARKET RECOVERY WILL BE A LONG, HARD-FOUGHT BATTLE - HELLENIC SHIPPING NEWS
Anyone who expects a strong rally in dry bulk market rates to end the industry’s downturn will be bitterly disappointed. By contrast – ...
Wednesday, 11 May 16
U.S. FORECAST COAL PRODUCTION IS EXPECTED TO DECLINED BY 150 MMST IN 2016; THE LARGEST DECLINE SINCE 1949 - EIA
COALspot.com: EIA estimates that U.S. coal production in April was 46 million short tons (MMst), a 6 MMst (12%) decrease from the previous month an ...
Wednesday, 11 May 16
MARKET INSIGHT - KATERINA RESTIS
On Saturday 7th May, Riyadh replaced the long-serving oil minister of more than two decades, Ali-Al-Naimi, as part of a major government overhaul, ...
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- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- ASAPP Information Group - India
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- VISA Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- PNOC Exploration Corporation - Philippines
- The University of Queensland
- Petron Corporation, Philippines
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Formosa Plastics Group - Taiwan
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- MS Steel International - UAE
- PowerSource Philippines DevCo
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Directorate General of MIneral and Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Bulk Trading Sa - Switzerland
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- SMC Global Power, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Ind-Barath Power Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
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