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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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Friday, 20 September 13
DRY BULK MARKET REACHES NEW HEIGHTS THIS WEEK STANDING AT THREE-YEAR HIGH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The biggest rally of the dry bulk market in more than three years have brought back joy among ship owners, especially those active in the Capesize m ...
Friday, 20 September 13
US COAL PRODUCTION SLIGHTLY UP WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer produced totalled approximately 20.30 million short tons (mmst) of ...
Friday, 20 September 13
COLOMBIA SHIPPED 31.14 MILLION TONS OF THERMAL COAL IN H1
COALspot.com : Colombia’s coal exports fell by 20.59 percent in June 2013 compared to Colombia’s May's export of 7,633,579 MT.
Colom ...
Thursday, 19 September 13
CAPESIZE : AVERAGE DAILY EARNINGS HAVE GAINED ALMOST USD 6K WOW - FEARNLEYS
Handy
The rates in Feast are still firm this week even the activity calmed down a bit as chrtrs are not in a rush to cover even their end Sept carg ...
Wednesday, 18 September 13
IRON ORE AND ZINC ARE BEST PERFORMING MINING SECTORS IN CURRENT LOW PRICE, HIGH COST ENVIRONMENT - WOOD MACKENZIE
With the fall in commodity prices, cash margins in the mining industry have come under pressure. Accordingly, producers and investors are placing in ...
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- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- Australian Coal Association
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- The University of Queensland
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Indika Energy - Indonesia
- PTC India Limited - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- White Energy Company Limited
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Ministry of Transport, Egypt
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- CIMB Investment Bank - Malaysia
- GAC Shipping (India) Pvt Ltd
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Bangladesh Power Developement Board
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Aboitiz Power Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sical Logistics Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sakthi Sugars Limited - India
- Port Waratah Coal Services - Australia
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- McConnell Dowell - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Rashtriya Ispat Nigam Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- MS Steel International - UAE
- Bukit Baiduri Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Antam Resourcindo - Indonesia
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Bahari Cakrawala Sebuku - Indonesia
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- European Bulk Services B.V. - Netherlands
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- ASAPP Information Group - India
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GMR Energy Limited - India
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Dalmia Cement Bharat India
- Planning Commission, India
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Bayan Resources Tbk. - Indonesia
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Ministry of Finance - Indonesia
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Coal Council - USA
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