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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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Tuesday, 26 April 16
INDONESIA BANNED COAL EXPORTS TO PHILIPPINES BY BARGES DUE TO SECURITY CONCERN
COALspot.com: The Ministry of Energy and Mineral Resources (ESDM) on behalf of the government of Indonesia has Freeze coal exports by barges to Phi ...
Tuesday, 26 April 16
NEWBUILDING DEMAND DOWN EVERYWHERE? - CLARKSONS
Newbuild activity provides one indication of an owner country’s likely future fleet growth, though secondhand sale and purchase and demolitio ...
Monday, 25 April 16
CHINESE STEEL PRICE SURGE NOT SUSTAINABLE - FITCH
The rapid increase in Chinese steel prices so far this year is not sustainable, as it is largely due to a seasonal pick-up in construction and elev ...
Monday, 25 April 16
WEEKLY CS (I) COAL INDICES END ALMOST FLAT
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.05 percent week over week to averaging $38.67 per ton on this past Friday, acco ...
Monday, 25 April 16
BALTIC DRY INDEX ENDS WEEK ON A POSITIVE NOTE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
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- Coalindo Energy - Indonesia
- Baramulti Group, Indonesia
- Sojitz Corporation - Japan
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- VISA Power Limited - India
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- The University of Queensland
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Indian Energy Exchange, India
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- International Coal Ventures Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Videocon Industries ltd - India
- Kumho Petrochemical, South Korea
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- PowerSource Philippines DevCo
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Electricity Generating Authority of Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Price Waterhouse Coopers - Russia
- Aditya Birla Group - India
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Indonesian Coal Mining Association
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Renaissance Capital - South Africa
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Malabar Cements Ltd - India
- Star Paper Mills Limited - India
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- CNBM International Corporation - China
- Edison Trading Spa - Italy
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Minerals Council of Australia
- Orica Mining Services - Indonesia
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bhushan Steel Limited - India
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Thai Mozambique Logistica
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- ASAPP Information Group - India
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- San Jose City I Power Corp, Philippines
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- Altura Mining Limited, Indonesia
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- London Commodity Brokers - England
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