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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, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Essar Steel Hazira Ltd - India
- SMC Global Power, Philippines
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Renaissance Capital - South Africa
- Krishnapatnam Port Company Ltd. - India
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- Vizag Seaport Private Limited - India
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Electricity Generating Authority of Thailand
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- Asmin Koalindo Tuhup - Indonesia
- Barasentosa Lestari - Indonesia
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Parliament of New Zealand
- GMR Energy Limited - India
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Electricity Authority, New Zealand
- Economic Council, Georgia
- Mintek Dendrill Indonesia
- Latin American Coal - Colombia
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Orica Australia Pty. Ltd.
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- The Treasury - Australian Government
- TeaM Sual Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Mjunction Services Limited - India
- Australian Coal Association
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