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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, 13 September 13
DIRECTOR GENERAL OF MINERAL AND COAL OF INDONESIA REVISED UP COAL PRICE REFERENCE TO US$ 76.89
COALspot. com - The Indonesian government has revised up its owned coal bench mark price by US$ 0.19/ MT to US$ 76.89 for September 2013 deliveries ...
Thursday, 12 September 13
PANAMAX : PACIFIC ROUNDS ARE NOW REPORTED BETWEEN USD 13K AND 15K PER DAY - FEARNRESEARCH
Handy
Nickel ore is a key support SE Asia/Feast rate at the moment; vessel in N.China were fixed around USD 11-12k, ships in mid China can expect a ...
Thursday, 12 September 13
CAPESIZE MARKET WILL BECOME EVEN TIGHTER - JEFFREY LANDSBERG
COALspot.com : While it is no secret that current capesize availability has become tight and has caused capesize rates to surge, availability is set ...
Thursday, 12 September 13
OVER THE WORST? WE MIGHT FIND OUT THIS WEEK - BIMCO
The shipping market has a spring in its step, even as summer draws to a close. There is it seems, confidence that finally, we are emerging into the ...
Thursday, 12 September 13
DRY BULK MARKET RALLY COMES AT A GOOD TIME FOR MOST SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of the dry bulk market has helped offset other lingering factors, which otherwise, could have plunged freight rates to new lows. Fo ...
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- Samtan Co., Ltd - South Korea
- Banpu Public Company Limited - Thailand
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Sarangani Energy Corporation, Philippines
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Port Waratah Coal Services - Australia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Eastern Coal Council - USA
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Pendopo Energi Batubara - Indonesia
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Heidelberg Cement - Germany
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Indonesian Coal Mining Association
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Bukit Makmur.PT - Indonesia
- Energy Link Ltd, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Siam City Cement PLC, Thailand
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Aditya Birla Group - India
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Bayan Resources Tbk. - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- ICICI Bank Limited - India
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- PNOC Exploration Corporation - Philippines
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- LBH Netherlands Bv - Netherlands
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Bulk Trading Sa - Switzerland
- Global Green Power PLC Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Kepco SPC Power Corporation, Philippines
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