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Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would be the case, i.e. ordering more ships than the market needed to cater to demand. As a result, returns have plummeted, leaving many funds looking for a way out, most notably the dry bulk market, as tanker owners are still protected from the downturn. In its latest report, Gibson noted that “undoubtedly 2015 was a memorable year. For some a year to forget for tankers a year to enjoy. Whilst the misery has continued for many, tankers are still generating healthy returns a cross most sectors, in part aided by cheap bunker prices. However, sentiment, particularly in the tanker time charter market has certainly taken a hit as of late as the global economic outlook becomes increasingly bearish”.
According to Gibson’s analysis, global stock markets have witnessed a terrible start with the China led malaise wiping billions off investments across the globe, unsettling the nerves of many investors, which perhaps explains the loss of appetite for long term commitments. It may be the view of some wealth managers mantra that the economy remains on track but it is difficult for many to stay calm when your investments have dropped in value by 15 to 20 per cent since April 2015. Furthermore after the initial boost of low oil prices, much concern is now focused on the health of the major producers who have expensed vast sums of foreign cash reserves in the face of falling oil prices”.
The shipbroker also noted that “back in August 2014, we highlighted the growing role of private equity in the shipping sector as the involvement of major banks gradually faded from its peak in 2007. We speculated that at least $7 billion would come from this sector in 2014 which was still a drop in the ocean in their overall portfolios. Wilbur Ross estimated that private equity pumped $16 billion into shipping between 2008 and 2013 – two and a half times the amount generated through initial public offerings”.
Meanwhile, “whilst the tanker sector has so far escaped the horrors of dry cargo, there is no longer the hunger of investors to continue their involvement with shipping, as the overall performance of these investments has not fulfilled expectations and they are looking for a swift exit. We argued back in 2014 that the activity was being driven by “other people’s money “ without sufficient restraints which can result in over ordering and this has certainly been a factor. As a result of that activity, several larger private equity groups that invested in shipping in the past, have decided to cut their losses and sell. Investment funds and banks do not want to be shipowners, trying to sell off unwanted assets where the buyers have the upper hand”, Gibson said.
It went on to note “whilst many traditional shipping banks continue to wind down their shipping portfolios, other banks have signalled an intention to increase their presence in the sector with China’s CMB Financial Leasing looking to increase shipping and aviation from 12% of its existing book to 25-40%. This points towards conventional banks playing more of a role once again in ship finance, yet it may not be the traditional European banks fulfilling this role”.
Gibson said though, that “there is a great deal of pain at the moment but this will be seen by some shipowners in a positive light going forward, where realistic ship ping constraints return t o investment decisions, preventing the mass ordering of unwanted new buildings that we have seen from some of the recently funded players from private equity. There is no question that this scenario will put an enormous strain on shipyards who will need to be able to offer financing such as we have seen from Chinese banks and the Export credit agencies in other Asian shipbuilding nations. However their biggest problem is that the market has more than enough ships to meet demand and shipbuilders are struggling to fill their forward slots. This sort of market brings the cash buyer to the fore and there are clear signs that they are focusing in on the opportunities that are being presented. In the dry sector as prices plummet, the traditional second hand cash buyers are becoming increasingly visible. For now tanker owners remain very much protected by the continued healthy state of the market, but we should take nothing for granted as we will encounter more challenges as we progress through 2016”, the shipbroker concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Wednesday, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at t ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
Friday, 19 February 16
INDONESIAN HBA HITS A NEW LOWS BELOW $51 A TON AS OVERSUPPLY, LOW DEMAND WOES PERSIST
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016. HBA has slumped second time t ...
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- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- PowerSource Philippines DevCo
- The University of Queensland
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Kepco SPC Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- The Treasury - Australian Government
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Electricity Generating Authority of Thailand
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The State Trading Corporation of India Ltd
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- MS Steel International - UAE
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Straits Asia Resources Limited - Singapore
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Parliament of New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Ambuja Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Port Waratah Coal Services - Australia
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
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