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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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- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Madhucon Powers Ltd - India
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Dalmia Cement Bharat India
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- Grasim Industreis Ltd - India
- Renaissance Capital - South Africa
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Parliament of New Zealand
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Latin American Coal - Colombia
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Ambuja Cements Ltd - India
- Mintek Dendrill Indonesia
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Chamber of Mines of South Africa
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Semirara Mining Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Meralco Power Generation, Philippines
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- The University of Queensland
- Siam City Cement PLC, Thailand
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Indian Energy Exchange, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Central Java Power - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Planning Commission, India
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Kumho Petrochemical, South Korea
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Coal and Oil Company - UAE
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Electricity Generating Authority of Thailand
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Australian Coal Association
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- Bhoruka Overseas - Indonesia
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement - Thailand
- Kalimantan Lumbung Energi - Indonesia
- Vizag Seaport Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
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