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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.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Thursday, 26 September 13
INTERCARGO PUBLISHES BENCHMARKING BULK CARRIERS 2012-13 REPORT
The International Association of Dry Cargo Shipowners (Intercargo) has today launched Benchmarking Bulk Carriers 2012-13, the latest edition of our ...
Thursday, 26 September 13
DRY BULK MARKET KEEPS ON RALLYING ON THE BACK OF HIGH CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its momentum over the course of the past week, on the back of increased demand for Capesizes and an improvement of mark ...
Wednesday, 25 September 13
RBCT'S COAL EXPORT DECLINES IN AUGUST
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal in South African as well as in the world has shipped 16. ...
Wednesday, 25 September 13
CAPES TOUCHING RATES NO ONE BELIEVED COULD BE ACHIEVED IN 2013 - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market is the gift that keeps on giving these days. With rates for Capes touching numbers ...
Wednesday, 25 September 13
IS IT TIME AGAIN TO SUPERSIZE AGAIN? - GEORGE LAZARIDIS
After an early arrival of the seasonal rally in the Capesize market, things look to be on the upbeat for these dry bulk giants. With the Index reach ...
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- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Romanian Commodities Exchange
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Mercator Lines Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Planning Commission, India
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Australian Coal Association
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Sree Jayajothi Cements Limited - India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Binh Thuan Hamico - Vietnam
- Trasteel International SA, Italy
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- VISA Power Limited - India
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Siam City Cement - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Latin American Coal - Colombia
- Rashtriya Ispat Nigam Limited - India
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- White Energy Company Limited
- South Luzon Thermal Energy Corporation
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- ICICI Bank Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Karbindo Abesyapradhi - Indoneisa
- Bangladesh Power Developement Board
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
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