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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.
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Wednesday, 11 September 13
ASIA - PACIFIC THERMAL COAL MARKET TO REMAIN OVERSUPPLIED IN NEXT 12 MONTHS - FITCH RATINGS
COALspot.com: Fitch Ratings says the Asia-Pacific thermal coal market will remain oversupplied in the next 12 months because strong production has b ...
Tuesday, 10 September 13
COAL EXPORTS AT AUSTRALIA'S NEWCASTLE PORT SLIP 30.31% ON WEEK TO 2.36 MMT
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port down 30.31 per cent week on week to 2.36 million mt f ...
Tuesday, 10 September 13
WORLDWIDE COAL CONSUMPTION RISES SHARPLY - RA DR. ERICH SCHMITZ
By: RA Dr. Erich Schmitz, Verein der Kohlenimporteure (Germany Coal Importers Association)
World hard coal market in the first half of 2013: worl ...
Monday, 09 September 13
REBOUND IN NEWBUILDING ORDERS HASN'T HURT DRY BULK MARKET PROSPECTS, BUT SHIP OWNERS SHOULD STILL BE CAUTIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Since the start of 2013 and up until the end of August, one thing has really caught the headlines in the dry bulk market, except of course, the frei ...
Sunday, 08 September 13
Q3 2014 THERMAL COAL SWAPS : STEADY DIRECTION
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery up 1.88 percent month on month. The swap was moved ...
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- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Minerals Council of Australia
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Wilmar Investment Holdings
- Economic Council, Georgia
- Indian Energy Exchange, India
- Planning Commission, India
- New Zealand Coal & Carbon
- LBH Netherlands Bv - Netherlands
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Vizag Seaport Private Limited - India
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Binh Thuan Hamico - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Sojitz Corporation - Japan
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Electricity Authority, New Zealand
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Goldman Sachs - Singapore
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Star Paper Mills Limited - India
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- PTC India Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- India Bulls Power Limited - India
- Salva Resources Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- PowerSource Philippines DevCo
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Anglo American - United Kingdom
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- Xindia Steels Limited - India
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- MS Steel International - UAE
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Commonwealth Bank - Australia
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Interocean Group of Companies - India
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Mercator Lines Limited - India
- White Energy Company Limited
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