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Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order is a hard decision nowadays for most ship owners, despite the fact that newbuilding prices are close to their lowest price levels in two decades. Despite this incentive, ship owners have to consider additional factors, such as financing, market conditions and of course freight rates. If they are low, then it’s hard to consider a newbuilding order, since the return on investment will most likely be low, making it more difficult to secure and ultimately paying off a bank loan to finance the newbuilding investment.
In a recent report, Intermodal, aknowledging the fact that timing is crucial in a strongly cyclical and capital intensive market, such as international shipping, examined the case of Kamsarmax dry bulk carriers. In his report, Intermodal’s Panos Tsilingiris, said that for the purpose of the exercise, Intemodal assumed that contracting takes place today and delivery is scheduled after about two years. Furthermore, “the vessel is operated is operated by the buyer for 10 full years (including her second SS/DD) and is sold thereafter. The residual sale price is the resale price of the vessel depreciated over 10 years at 5% p.a. We accept newbuilding prices of $ 26.5 million basis 30/70 payment terms plus $ 500k pre-delivery expenses. With regards to financing, we suppose 60% loan with a fixed interest rate of 5% and 25% balloon, and arrangement/commitment costs of approximately 1.5% of the loan facility. The remaining 40% is financed via equity at 12% p.a. The Opex costs begin with xs $ 6,000/day and are subject to a 2.5% annual appreciation, while we also factor in indicative dry-docking costs. Assuming 365 OPEX days and 350 TC days, the resulting break-even TC rate for the 10-year period is $ 15,959/day” said Tsilingiris.
He added that “at first sight, the above figure may not enthuse speculators when compared to the current freight market in which Kamsarmax bulkers struggle to achieve double-digit yearly TC rates. However, the seasoned shipowner will recognize that this figure is well below the 20-year average, the 10-year average, and the 10-year average after excluding the 2007-2008 bubble years.
Further to the attractive break-even point, the driving force for newbuildings is the high price of bunkers; the ‘eco-type’ designs with their promised (yet generally unproven so far) increased energy efficiency appear tempting to both owners and charterers. Owners might prefer newbuildings over second-hand tonnage since they do not expect a radical peak-up in the dry bulk freight markets during 2012-2013. Moreover, the long operating life of a newbuilding provides some encouragement, if not statistical certainty, that the market will peak up at least once during the vessel’s operating life. There is hope that due to the significantly slower recent contracting of bulker newbuildings and assuming no collapse in demand, the market will return to healthy levels within 2015. Of course, massive orders, something not expected in the short-term given the current market, the tight financing and the global economic uncertainty, would negate any benefit from the lower break-even point of such investments” he said.
As a result, the report from Intermodal concludes that “while the exact figures depend upon the idiosyncrasies of the specific project and ship-owner as well as market conditions (LIBOR, actual TC rates, residual value, etc.), we have shown how the low entrance point for newbuildings renders attractive the break-even rate of such investments. In conclusion, as low shipbuilding prices gradually concur with the maturing of eco-type designs, newbuilding investments appear increasingly attractive” it said.
Source: Nikos Roussanoglou, Hellenic Shipping
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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
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- Wilmar Investment Holdings
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- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Orica Mining Services - Indonesia
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
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- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
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- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Sojitz Corporation - Japan
- Ministry of Transport, Egypt
- Pipit Mutiara Jaya. PT, Indonesia
- Essar Steel Hazira Ltd - India
- Marubeni Corporation - India
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Australian Coal Association
- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Gujarat Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Trasteel International SA, Italy
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kohat Cement Company Ltd. - Pakistan
- Mercuria Energy - Indonesia
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- TNB Fuel Sdn Bhd - Malaysia
- Globalindo Alam Lestari - Indonesia
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Timah Investasi Mineral - Indoneisa
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Coastal Gujarat Power Limited - India
- European Bulk Services B.V. - Netherlands
- Electricity Authority, New Zealand
- IHS Mccloskey Coal Group - USA
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Jaiprakash Power Ventures ltd
- Bharathi Cement Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Thai Mozambique Logistica
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- VISA Power Limited - India
- Romanian Commodities Exchange
- Kartika Selabumi Mining - Indonesia
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Energy Development Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- The University of Queensland
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