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, 04 October 10
2 BLN TONS OF COAL RESERVES DISCOVERED IN SOUTHERN PAKISTAN - XINHUA / HELLENIC SHIPPING
Xinhua and Hellenic Shipping reporte dhtat, the discovery of at least two billion tons of usable coal reserves has been confirmed in one of the ...
Sunday, 03 October 10
THE BDI WAS JUST INCREASED BY 8 POINTS AND CLOSED AT 2452 POINTS LAST FRIDAY - VISTAAR
COALspot.com: The BDI was almost at same levels and just increased by 8 points and closed at 2452 points , however the cape index was up by al ...
Sunday, 03 October 10
NALCO TO FINALIZE INDONESIA COAL DEAL BY JANUARY - HINDUSTAN TIMES
HindustanTimes reported that, state-owned National Aluminium Company (NALCO) will finalise a deal with a coal source in Indonesia for its $4 billion ...
Sunday, 03 October 10
INDONESIA WILL BECOME A NET IMPORTER OF ENERGY IN 2030 - BPPT
Jakarta Updates reported that,Indonesian Agency for the Assessment and Application of Technology (BPPT) predicted that the energy situation in Indon ...
Saturday, 02 October 10
FOUR INDONESIAN COAL FIRMS KEEN TO TIE UP WITH NALCO - SIFY
Sify reported that, Four Indonesian coal companies have shown interest to tie up with public sector National Aluminium Company (Nalco) for its 4 bil ...
|
|
|
Showing 5581 to 5585 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vizag Seaport Private Limited - India
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Ministry of Finance - Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- PowerSource Philippines DevCo
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Parliament of New Zealand
- Madhucon Powers Ltd - India
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Bayan Resources Tbk. - Indonesia
- Tata Chemicals Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- PTC India Limited - India
- SN Aboitiz Power Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Uttam Galva Steels Limited - India
- TeaM Sual Corporation - Philippines
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Mintek Dendrill Indonesia
- Electricity Generating Authority of Thailand
- Banpu Public Company Limited - Thailand
- Australian Coal Association
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- European Bulk Services B.V. - Netherlands
- CNBM International Corporation - China
- Karaikal Port Pvt Ltd - India
- Grasim Industreis Ltd - India
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Indian Oil Corporation Limited
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Romanian Commodities Exchange
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- White Energy Company Limited
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Parry Sugars Refinery, India
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Indonesian Coal Mining Association
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Wood Mackenzie - Singapore
- Port Waratah Coal Services - Australia
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Malabar Cements Ltd - India
- Jindal Steel & Power Ltd - India
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Anglo American - United Kingdom
- Sarangani Energy Corporation, Philippines
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Planning Commission, India
- Lanco Infratech Ltd - India
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
|
| |
| |
|
