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Wednesday, 07 August 13
HANDIES : FINDING IT DIFFICULT TO SUSTAIN THEIR PREVIOUS LEVELS - KONSTANTINOS KONTOMICHIS
 Broker's insight
by Konstantinos Kontomichis,
SnP Broker
Entering the most predictable month of the year, as expected the seasonal effects has pushed sentiment back into negative territory. As the Greek owners are enjoying their summer time off, the S&P market is falling apart. While few prospective buyers have stayed back in their office to grab any chances and possibly avoid competition while doing so, most seem to have postponed their interest till September in the hope of seeing a market that they feel will make more sense. One can say that the recent price inflation posted over the last two quarters in the Dry Bulk market and more specifically for panamax vessels, is an additional reason for some to switch over to a “wait & see” attitude at least until the slowest month (in terms of chartering) has past.
From the beginning of 2013, handy tonnages have faced the smallest fluctuations in values, reflecting the fact that they still the vessels holding the lowest risk exposure in the dry market. Supramax asset values were running on the high end, something which is quite reasonable though considering the fact that this size segment has been enjoying the best returns in the market over the last couple of years. On the other hand the poor rates, overwhelming delivery schedule and overall negative sentiment for Panamaxes during the second half of the previous year caused depressed sales in the sector. The cheapest deals took place, during the end of 2012 and the very beginning of 2013, providing the groundwork and sparking heavy competition amongst Greek cash buyers which resulted in the unexpected climb in prices.
The recent rally in asset prices which we witnessed was also driven by the appearance of funds and private-equity covering the gap left from the more cautious and now heavily regulated banks. Many were claiming “we are scratching the bottom” and their words translated to private investors as “rock bottom bargain prices”. Of course along the way several additional economic factors played their part in the underling reasoning. The bankruptcy of the Cypriot banking system, the instability of Greek financial institutions and the clouded economic policy of the European Union was enough to push investors to the “sea” as a much “safer” choice.
In all these “safer” decisions there seems to be little room for “profitable”. The above decisions are locked at the going charter rates. It does not make any sense at these levels as the actual earnings do not reflect the levels that ship prices have reached. It is no surprise that we have not only reached back to pre-boom long-term repayment periods for bank loans and even surpassing them. Owners are struggling, shipping is still looking like part of a falling domino structure while many fundamentals are still missing from the market such as financing, economic stability, strong world economic growth, slower supply growth etc. Waiting for a market comeback we have to remember there is always a 'Dummy variable”. No one can predict the future, and despite everything seeming “bearish”, there is no telling of the potential direction the market could end up taking.
Chartering (Wet: Stable- / Dry: Stable- )
With the exception of the Capes, the whole of the Dry Bulk market witnessed a further correction in rates on the face of slower activity in the Atlantic and poor positioning overall. The summer blues have continue to overwhelm market players and things are looking set for further decreases over the next couple of days. The BDI closed today (06/08/2013) at 1046points, down by 12 points compared to Monday’s levels (05/08/2013) and a decrease of 21 points compared to previous Tuesday’s levels (29/07/2013).
The crude oil market noted some correction, however overall demand has held fairly well especially when one considers that this is traditionally the slowest part of the year. Demand for Crude oil from the U.S. has now drop, leaving the market ripe for a drop though you never know in this sort of market. The BDTI Monday (05/08/2013), was at 618 points, a decrease of 32 points and the BCTI at 612, an increase of 5 points compared to the previous Monday’s levels (28/07/2013).
Chartering
There was a hold in the rates drop for Capes, with the Atlantic basin showing some improved demand and fending off any further weakening for now. The Pacific was the real market support this week, helping cover much of the slack in demand left by a softer Atlantic and allowing for some temporary relief. With activity likely to drop further over the next couple of weeks especial for iron ore cargoes, August is likely to be a fairly poor performance overall and this current levels are unlikely to hold for long.
Continuing on from the week prior, Panamaxes lost further support this past week as the Atlantic drop further on the face of fewer inquiries coming in from ECSA. The Pacific on the other hand is in no state to cover the gap in demand and is likely going to feel further weakening itself. This overall slower activity has taken its toll on sentiment and it is likely that we will see the index close of this coming Friday well below the 1,000 point mark.
This slower activity in the Atlantic took its toll on Supras as well this week, as it now becomes more evident to what degree the demand from ECSA was holding the market buoyant these past weeks. There was some gains to be noted on other Atlantic basin routes such as Continent/US Gulf, however these were to insignificant to effect the overall picture. Handies were also finding it difficult to sustain their previous levels and have also seen a slight overall drop these past few days. The Pacific basin wasn’t looking very charming either with decreased demand for raw resources from China these past weeks and India still remaining fairly subdued, it looks as though it will be another gloomy August as usual.
Compiled by:
Intermodal Research & Valuations | research@intermodal.gr
Analysts:
Mr. George Lazaridis | g.lazaridis@intermodal.gr
Ms. Eva Tzima | e.tzima@intermodal.gr
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Sunday, 29 September 13
SUB-BIT INDONESIA COAL SWAP FELL ON MONTH AND WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 3.93 percept month on month on Friday 27 September 2 ...
Friday, 27 September 13
TAIWAN'S FORMOSA TO IMPORT 140K MT OF BITUMINOUS COAL FOR Q4
COALspot.com : Taiwan's Formosa Plastics Group is inviting bids for 140,000 mt of bituminous coal for delivery in the Q4 for its China plant.
Ac ...
Friday, 27 September 13
CAPESIZES REGAINING PART OF THEIR FORMER GLORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The latest dry bulk market rally has been nothing short of spectacular, with freight rates more than doubling over the past few weeks. This growth h ...
Friday, 27 September 13
US PRODUCED 19.30 MMST OF COAL IN SEVEN DAYS
COALspot.com – United States the world’s second largest coal producer produced approximately 19.30 million short tons (mmst) of coal in ...
Thursday, 26 September 13
PANAMAX MARKET CONTINUE WITH STRONG RATES IN BOTH BASINS - FEARNRESEARCH
Handy
Feast rates are still firm, some fresh stems entered the market. Vessels trading around $15k passing Singapore for coal to India, and a bit l ...
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- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Medco Energi Mining Internasional
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- IEA Clean Coal Centre - UK
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Globalindo Alam Lestari - Indonesia
- Cement Manufacturers Association - India
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Parliament of New Zealand
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Semirara Mining and Power Corporation, Philippines
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Malabar Cements Ltd - India
- Indonesian Coal Mining Association
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Tata Chemicals Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Wilmar Investment Holdings
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- Jindal Steel & Power Ltd - India
- Kumho Petrochemical, South Korea
- Orica Mining Services - Indonesia
- Semirara Mining Corp, Philippines
- Lanco Infratech Ltd - India
- Siam City Cement - Thailand
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- The University of Queensland
- Mintek Dendrill Indonesia
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- The Treasury - Australian Government
- Latin American Coal - Colombia
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- McConnell Dowell - Australia
- PetroVietnam Power Coal Import and Supply Company
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Power Finance Corporation Ltd., India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- LBH Netherlands Bv - Netherlands
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