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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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Wednesday, 18 September 13
DRY BULK MARKET CONTINUED TO ADVANCE - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market continued to advance at a very fast pace, with the BDI closing off the week north ...
Tuesday, 17 September 13
BUMA PRODUCED 3.57 PERCENT MORE COAL IN AUGUST
COALspot.com: BUMA has removed totaled 25.20 million bcm of overburden to produce 2.90 million tons coal in August 2013. BUMI produced 3.07 percent ...
Tuesday, 17 September 13
NEWCASTLE PORT SHIPPED ABOUT 27 PERCENT MORE COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 27.26 per cent week on week to 3.01 million mt for ...
Tuesday, 17 September 13
TAIPOWER INVITES BIDS FOR SUPPLY OF SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 1.050 million tons of sub-bituminous coal for Taipower thermal power plant through open tende ...
Tuesday, 17 September 13
ORPHEUS SECURES SIGNIFICANT INFRASTRUCTURE DEAL THROUGH ACQUISITION OF SOUTH KALIMANTAN PORT CAPACITY
COALspot.com : Orpheus Energy Limited (ASX: OEG) of Australia has today announced that, it has executed a binding agreement with the proprietor of S ...
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- Port Waratah Coal Services - Australia
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- ASAPP Information Group - India
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Kohat Cement Company Ltd. - Pakistan
- Ind-Barath Power Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Posco Energy - South Korea
- Australian Commodity Traders Exchange
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Mercuria Energy - Indonesia
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Star Paper Mills Limited - India
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Thiess Contractors Indonesia
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Minerals Council of Australia
- Eastern Energy - Thailand
- Rio Tinto Coal - Australia
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Aboitiz Power Corporation - Philippines
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Indogreen Group - Indonesia
- Iligan Light & Power Inc, Philippines
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Georgia Ports Authority, United States
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Holcim Trading Pte Ltd - Singapore
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Therma Luzon, Inc, Philippines
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Gujarat Mineral Development Corp Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
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