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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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Tuesday, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
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- Meralco Power Generation, Philippines
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- Thiess Contractors Indonesia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Deloitte Consulting - India
- Toyota Tsusho Corporation, Japan
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Kohat Cement Company Ltd. - Pakistan
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- South Luzon Thermal Energy Corporation
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Chamber of Mines of South Africa
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Petron Corporation, Philippines
- Bhatia International Limited - India
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Coalindo Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- White Energy Company Limited
- MS Steel International - UAE
- Borneo Indobara - Indonesia
- Sindya Power Generating Company Private Ltd
- Ministry of Transport, Egypt
- Indian Energy Exchange, India
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- PTC India Limited - India
- Standard Chartered Bank - UAE
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Samtan Co., Ltd - South Korea
- Rashtriya Ispat Nigam Limited - India
- Power Finance Corporation Ltd., India
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Planning Commission, India
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Price Waterhouse Coopers - Russia
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- The University of Queensland
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Orica Australia Pty. Ltd.
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
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