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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, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
Several factors have aligned over the past two years to create a robust and profitable market for tanker owners, which is expected to drive newbuil ...
Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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Showing 31 to 35 news of total 6871 |
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- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Altura Mining Limited, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Simpson Spence & Young - Indonesia
- Bukit Baiduri Energy - Indonesia
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Kumho Petrochemical, South Korea
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- The University of Queensland
- CNBM International Corporation - China
- Ind-Barath Power Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Cigading International Bulk Terminal - Indonesia
- Bhushan Steel Limited - India
- Sarangani Energy Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Parry Sugars Refinery, India
- Marubeni Corporation - India
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Georgia Ports Authority, United States
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Orica Mining Services - Indonesia
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Electricity Generating Authority of Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- SMC Global Power, Philippines
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Deloitte Consulting - India
- Bharathi Cement Corporation - India
- CIMB Investment Bank - Malaysia
- Jaiprakash Power Ventures ltd
- Independent Power Producers Association of India
- Krishnapatnam Port Company Ltd. - India
- Oldendorff Carriers - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Australian Coal Association
- Planning Commission, India
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Star Paper Mills Limited - India
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- White Energy Company Limited
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