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Thursday, 07 July 16
CONSOLIDATION TO RULE OVER SHIPPING, AS EXECUTIVES SEEK INVESTMENT OPPORTUNITIES IN CHINA, INDIA AND EUROPE SAYS NORTON ROSE SURVEY
 The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead Transport survey from global law firm Norton Rose Fulbright. China and India are the most popular jurisdictions for investment, followed by the US, with growth through consolidation viewed as the best investment opportunity currently. While confidence among respondents from the aviation and rail industries is high, owing to lower oil prices, the availability of funding and the impact of infrastructure improvements, the shipping industry remains the least optimistic as a result of overcapacity in many subsectors of the market.
Over half (52%) of all respondents to the Norton Rose Fulbright survey agree that a global recession poses the greatest threat to their industry. However, despite political uncertainty, most agree that the transport sector can expect to enjoy further growth over the next five years. Rising passenger numbers and freight volumes are anticipated (by 73%) and an increase in the number of routes and services is expected (52%).
Investment in technology is expected to rise, according to 67%, with low carbon technology and predictive analytics expected to represent the most significant driver of change in the transport sector over the next five years.
Infrastructure remains a key theme for the sector. After consolidation, infrastructure improvements are viewed as the best investment opportunity currently (by 19%), and infrastructure investment is seen as the most helpful form of government support (by 25%). For the aviation, rail and road industries, inadequate infrastructure is seen as the greatest challenge to the operational efficiency of their industries.
Bank debt, capital markets and private equity will represent transport businesses’ main sources of funding over the next two years, and 74% of respondents expect the availability of funds to stay the same, or even increase, over the next five years.
Harry Theochari, global head of transport at Norton Rose Fulbright, comments:
“The transport sector is continuing to look to Asia Pacific for investment opportunities, encouraged by rising demand and China’s ambitious Belt and Road initiative, a modern day silk road which will improve China’s infrastructure links with the rest of the world.
“Sentiment is high in the aviation and rail industries, buoyed by the expectation of increased passenger numbers. However, shipping continues to feel the effects of overcapacity in many markets, and an increase in enforcement actions is widely predicted, although in the longer term respondents believe conditions will improve.
“Investment in infrastructure and technology, and consolidation through both M&A and joint ventures, will be key drivers for transforming the transport sector and assisting growth.
“The adoption of new technology in particular will help to address numerous issues the sector has been grappling with in recent years, such as low carbon technology to meet increasingly stringent environmental legislation, and predictive analytics to anticipate repairs and maintenance and better understand and forecast consumer behavior.
“While respondents are most fearful of the impact of a worldwide recession, they will be watching closely the implications of the UK’s referendum result. The transport sector is international and highly regulated and any UK exit from the EU would need to take into account a number of complex issues.”
Shipping
Shipping is the least optimistic industry within the transport sector, by a significant margin. Only 15% believe that current market conditions are positive, down from 33% in 2015 and 69% in 2014.
Overcapacity is the principal reason given for this lack of optimism (66%), followed, to a lesser extent, by economic uncertainty in key markets (27%).
Respondents are more optimistic when asked to consider the outlook for shipping over the next five years. Fares and freight costs will increase according to 67% and the same proportion anticipate an upturn in passenger numbers and freight volumes. The number of routes and services offered is also expected to rise, according to 35%. However, just 22% believe that funding will become more readily available and 64% think that the number of enforcement actions will increase as lenders seek to protect their positions and recover losses. Most (68%) expect fuel costs to rise.
Investment opportunities
Much of the shipping industry (58%) continues to favour Asia Pacific for investment opportunities over the next two to five years, followed, to a far lesser extent, by Europe (16%). China (17%) and India (16%) remain the most popular markets for investment.
A merger or acquisition is seen as the optimal investment opportunity (by 34%, up from 29% in 2015), while 13% favour joint ventures, alliances and pools (down from 28% in 2015).
Respondents expect consolidation to be at the centre of shipping businesses’ strategies over the next 12 months, either in the form of M&A (22%) or joint ventures (19%), while 22% expect a focus on the disposal of non-core assets. Almost three-quarters (72%) expect investment in technology to increase over the next five years, with low carbon technology expected to have the most significant impact on the industry during this period (by 33%), followed by predictive analytics (by 24%).
Regulation
Almost half (42%) believe that greater transparency in the application and enforcement of existing and proposed regulations would be the most helpful form of government support for the shipping industry, more so than fiscal incentives (32%) or investment in infrastructure (29%). Environmental regulation is seen as the regulation that has had the greatest impact on shipping over the past decade (by 49%), followed by trade and financial sanctions (by 25%).
Supply and demand imbalances are seen as the greatest challenge to the operational efficiency of the industry (by 47%), followed by a lack of qualified people (12%) and emission controls (9%). A global recession is seen as the greatest threat to the health of shipping over the next five years (by 68%). To a lesser extent, respondents are also concerned about the impact of enforcement by creditors on debt obligations (12%) and continued political and economic uncertainty in the Eurozone (8%).
Bank debt is once again expected to act as shipping’s primary source of funding over the next two years (22%), followed by shareholder support (18%) and private equity (16%).
Despite the problem of overcapacity in many sub-sectors of the industry, fuelled by new build vessels coming on to the market, 11% think that ECA funding will be the industry’s main
source of finance.
Source: Norton Rose Fulbright | Hellenic Shipping
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Monday, 11 July 16
THE MAIN SEA FREIGHT INDEX, BDI ROSE FURTHER ON 8 JULY DUE TO STRONG DEMAND FOR PANAMAX SHIPS
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week. The BDI was up 3.84 percent from las ...
Monday, 11 July 16
DRY BULK MARKET: UP TO 30 MILLION DWT OF OLDER BULKERS WILL NEED TO BE SCRAPPED BY END OF 2017 FOR MARKET TO FIND BALANCE
Tonnage oversupply in the dry bulk market is more than evident, as newbuildings have been hitting the water faster than owners can scrap their olde ...
Friday, 08 July 16
U.S. WEEKLY COAL OUTPUT UP 3% TO 14.1 MMST - EIA
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 14.1 million short tons (mms ...
Thursday, 07 July 16
PANAMAX : THE TENDENCY FROM LAST WEEK CONTINUES WITH A CONSIDERABLY STRONGER SENTIMENT ALL ACROSS THE BLOCK - FEARNLEYS
Capesize
Rates have been holding at steady levels over the last weeks but towards end of this period they are becoming under more pressure as gen ...
Wednesday, 06 July 16
KOMIPO INVITES BIDS FOR 780000 MT OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
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- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Cement Manufacturers Association - India
- Australian Coal Association
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Eastern Coal Council - USA
- Vijayanagar Sugar Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Global Coal Blending Company Limited - Australia
- White Energy Company Limited
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- Iligan Light & Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Altura Mining Limited, Indonesia
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Mines - Canada
- Larsen & Toubro Limited - India
- Aboitiz Power Corporation - Philippines
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Holcim Trading Pte Ltd - Singapore
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Vizag Seaport Private Limited - India
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Medco Energi Mining Internasional
- Oldendorff Carriers - Singapore
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Planning Commission, India
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Metalloyd Limited - United Kingdom
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Krishnapatnam Port Company Ltd. - India
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Siam City Cement PLC, Thailand
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tamil Nadu electricity Board
- Sical Logistics Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
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