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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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Monday, 23 September 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 3 PERCENT LESS COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 3 per cent week on week to 2.92 million mt for t ...
Sunday, 22 September 13
BDI STRENGTHENS FURTHER AS CAPESIZE FREIGHT RATES JUMP - CAPT. REDDY
COALspot.com: The freight market continued its upward trend and maintaining the moment with BDI and Cape index up by 16 pct week on week. The Capesi ...
Sunday, 22 September 13
API 8 CFR SOUTH CHINA COAL SWAPS ADVANCE
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
Sunday, 22 September 13
SUB-BIT INDONESIA COAL SWAPS REMAIN UNDER PRESSURE
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery down 2.09 percept month on month on Friday 20 September 2 ...
Friday, 20 September 13
SHIP OWNERS INVEST MORE THAN $9.2 BILLION ON NEW BUILDING VESSELS DURING AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the fact that August is traditionally a slow month in terms of ships investment activity, ship owners have grasped this year the opportunity ...
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- Siam City Cement - Thailand
- The University of Queensland
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Wilmar Investment Holdings
- SN Aboitiz Power Inc, Philippines
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Australian Commodity Traders Exchange
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Planning Commission, India
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- The State Trading Corporation of India Ltd
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Singapore Mercantile Exchange
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Carbofer General Trading SA - India
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Parliament of New Zealand
- Deloitte Consulting - India
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Indika Energy - Indonesia
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- The Treasury - Australian Government
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- India Bulls Power Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Ministry of Transport, Egypt
- Siam City Cement PLC, Thailand
- Baramulti Group, Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- White Energy Company Limited
- Electricity Generating Authority of Thailand
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Edison Trading Spa - Italy
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meralco Power Generation, Philippines
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Straits Asia Resources Limited - Singapore
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