We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Wednesday, 15 December 10
LARGE ORDERBOOK TO HINDER 2011 DRY BULK MARKET REBOUND DESPITE INCREASED DEMAND SAYS PARAGON SHIPPING - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
 A large orderbook which currently stands at 53% of the existing fleet is expected to render 2011 another challenging year for the dry bulk market. According to Mr. Michael Bodouroglou, Chairman and CEO of Paragon Shipping Inc., in an interview with Hellenic Shipping News Worldwide,
“we believe that 2011 should be a challenging year due to the amount of new vessels that are expected to hit the water during the year”. Providing with an explanation on the flurry of newbuilding orders this year, Mr. Bodouroglou said that current newbuilding prices are 12% below where the prompt resale values are, “so we do believe that the newbuilding market offers the best value in the drybulk sector” he said.
Paragon Shipping recently posted its third quarter and nine-month results. Which were the key performance figures you would highlight?
Despite the turbulence in the markets of the past two years, our chartering strategy enabled us report our 13th straight profitable quarter since we went public in 2007. This past quarter, there was a lot of activity, and we diversified into the containership market, and expanded our fleet without risking our balance sheet and maintaining our dividend. In addition, our adjusted EBITDA was $19.6 million in the third quarter, which was a $3 million improvement over the previous quarter, and our leverage remains at a moderate 57%.
What about your stock’s valuation? Do you think that there is enough room for an increase?
Absolutely, we feel our stock is undervalued. With our current charter coverage at 98% for 2011, our revenues are insulated from any market fluctuations that may occur next year and our stock price doesn’t properly reflect this. Our time charter coverage makes us feel our stock price should be higher.
Do you think that this volatility of the market will continue in 2011 or will things be more stable going forward?
We believe that 2011 should be a challenging year due to the amount of new vessels that are expected to hit the water during the year. Our outlook on the demand side is very positive, and we expect to see increased demand for iron ore and coal from the Asian markets during 2011.
However, the orderbook remains very large with 53% of the existing fleet on order, and even with most analysts’ predictions that continued slippage should be in the range of 30%-40% of the expected deliveries, we expect an oversupply of vessels in 2011, which should create a more volatile market next year.
Oversupply issues have plagued the dry bulk market this year. Are you more optimistic about 2011 or not, especially with regards to the Panamax segment where Paragon has an increased presence?
As I mentioned above, we remain concerned about the orderbook for 2011, and while the orderbook is the largest for Capesized vessels, at 60% of the current fleet, Panamaxes also have a large orderbook at 50% of the current fleet, so we expect to feel some pressure on rates in 2011. This is why we have been proactive in locking up 98% of our revenues for 2011, so that we are protected against a decline in freight rates next year.
This year we witnessed a strong rebound of newbuilding orders which are difficult to justify given the already huge orderbook. Are valuations really that low? What’s your opinion on the matter?
In today’s market, you can see that current newbuilding prices are 12% below where the prompt resale values are, so we do believe that the newbuilding market offers the best value in the drybulk sector.
That is also why you continue to see newbuildings being ordered despite the large orderbook. We ordered seven newbuildings earlier this year, to be delivered between October 2011 and December, 2012, so we have backed up our view with action.
New building cancellations and scrapping of older bulkers seem to be the best chance that shipping has to improve freight rates. How is each of these solutions progressing since the beginning of the year?
Cancellations are very hard to measure, because neither the yards nor the shipowners have an incentive to announce them. This year, it appears cancellations have stalled as the markets were much stronger than expected. There have also been many new orders, which may have been new owners taking over someone else’s order, but these types of deals may never become clear. We continue to see a high amount of slippage, which will push the current orderbook out further, and hopefully extend the orderbook far enough out into the future so that demand will have time to catch up with supply. In addition, vessel scrapings have decreased this year and unless rates are depressed for an extended period, there is no incentive to scrap older tonnage. We would need a market where rates remain depressed for six to nine months before scrapings would be significant enough to offset new deliveries. This is also more pronounced with the smaller tonnage, as over 50% of the handysize fleet is older than 20 years of age, compared to only 16% for the capesize fleet.
How would you characterize the current market for second hand vessels? Are asset values corresponding to current freight rates?
We believe asset values are artificially inflated at current levels, and it is shown by the fact that the price of a five-year old Panamax is 11% above its 10-year historical average, compared to the one-year T/C rate that is 8% below its 10-year historical average. To us, this signifies that second hand values are higher than they should be and that there is a disconnect in the current market between vessel values and freight rates.
Would you see investment opportunities in today’s market conditions?
We have struggled looking for investment opportunities in today’s markets, although we believe that in the drybulk sector, the Handysize vessels are the most attractive at the moment. As we mentioned, over 50% of the fleet is older than 20 years of age, and it also has the smallest orderbook at the moment with 33% of the current fleet on order. We feel Handysize vessels maintain stable earnings, even in declining markets and have the best supply/demand dynamic of the drybulk sector.
What about cargo demand in the future? Is a booming China enough on its own to sustain the global fleet growth?
While China continues to be the primary driver for the drybulk market, other Asian Countries, most notably, India, have also been growing at a significant pace, and it is no longer demand for Iron Ore alone that drives freight rates, it is also the increased demand for Coal. The combined demand for Coal imports from India and China has helped boost the markets in 2010, and we expect this to continue for the next several years. As these Countries continue to build up their infrastructure, there will be an increased demand for energy, which should continue to drive increases in coal imports into China and India. So while China alone may not be able to utilize new tonnage that is expected to enter the market in the coming years, the combination of China, India and the rest of the Asian markets should be able to absorb this tonnage over time. We don’t expect this to happen in 2011, although we expect the market to be stabilized by 2013.
Interviewed by : Nikos Roussanoglou, Hellenic Shipping
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 08 November 10
INDONESIAN HBA HAS INCREASED TO $ 95.51 PER TON FOR NOVEMBER LOADING
COALspot.com: The Directorate General of Mineral, Coal and Geothermal of Indonesia has been publishing a monthly coal price reference (HBA) since Fe ...
Sunday, 07 November 10
THE SUPRAMAX INDEX IN THE FAR EAST CONTINUED TO BE UNDER PRESSURE - CAPT. REDDY
COALspot.com: The freight market continued to remain soft and all segments were down by almost about 6 pct.
The BDI and Cape Size index was down ...
Saturday, 06 November 10
DRY BULK MARKET LACKING SUPPORT TO SUSTAIN CURRENT LEVELS, BUT PANAMAX OWNERS ARE MORE FORTUNATE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Posting its fifth straight losing session, the dry bulk market benchmark, the BDI (Baltic Dry Index) was down yesterday by another 1.26% to 2510 poi ...
Friday, 05 November 10
RI COAL EXPORT PROSPECTS STILL BRIGHT - THE JAKARTA POST
The Jakarta Post reported that, Indonesia, already the world’s largest exporter of seaborne thermal coal since 2005, will continue to be a maj ...
Thursday, 04 November 10
CAPE SIZE SENTIMENT FOR THIS WEEK WAS NEGATIVE - FEARNBULK
Handy
The Atlantic markets remain flat and lackluster. High volume of tonnage availabi ...
|
|
|
Showing 5536 to 5540 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Minerals Council of Australia
- Sojitz Corporation - Japan
- Planning Commission, India
- Kumho Petrochemical, South Korea
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- India Bulls Power Limited - India
- Manunggal Multi Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sical Logistics Limited - India
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- MS Steel International - UAE
- Malabar Cements Ltd - India
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- Coal and Oil Company - UAE
- Indian Energy Exchange, India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Trasteel International SA, Italy
- White Energy Company Limited
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Meralco Power Generation, Philippines
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Africa Commodities Group - South Africa
- SMG Consultants - Indonesia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Bank of Tokyo Mitsubishi UFJ Ltd
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Central Electricity Authority - India
- Dalmia Cement Bharat India
- Billiton Holdings Pty Ltd - Australia
|
| |
| |
|
