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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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Sunday, 08 September 13
BALTIC INDEX UP ON HIGHER CAPESIZE, PANAMAX RATES
COALspot.com : The freight market continued saw one of the biggest rally last week with Cape Size taking the lead followed by Panamax.
The BDI wa ...
Friday, 06 September 13
DRY BULK MARKET REACHES NEW YEAR-HIGHS ON THE BACK OF INCREASED CAPESIZE DEMAND - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has been on the rise once again, but this time around any new increase of freight rates translates into new year-highs, thus bri ...
Friday, 06 September 13
US PRODUCED APPROXIMATELY 90.80 MMST OF COAL IN AUGUST
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.90 million short tons (mmst) of ...
Thursday, 05 September 13
INDONESIAN COAL EXPORTS UP BY 6.72 PERCENT IN JULY
COALspot.com: Indonesia, the world's largest multi grade coal exporter shipped 35.268* million tons of coal in July 2013. Indonesian coal exp ...
Thursday, 05 September 13
HANDY: NICKEL ORE WAS PUSHING THE FAR EAST MARKET - FEARNLEYS
Handy
Nickel Ore was pushing the Feast market, several ships were fixed from low teens to $14k. Indo/India was still supported by bauxite, while th ...
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- The State Trading Corporation of India Ltd
- Australian Coal Association
- SN Aboitiz Power Inc, Philippines
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Siam City Cement PLC, Thailand
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Sojitz Corporation - Japan
- Bangladesh Power Developement Board
- Karaikal Port Pvt Ltd - India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Wood Mackenzie - Singapore
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- VISA Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- ICICI Bank Limited - India
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Simpson Spence & Young - Indonesia
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- Port Waratah Coal Services - Australia
- Africa Commodities Group - South Africa
- MS Steel International - UAE
- Billiton Holdings Pty Ltd - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- ASAPP Information Group - India
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Borneo Indobara - Indonesia
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Deloitte Consulting - India
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Gujarat Mineral Development Corp Ltd - India
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Antam Resourcindo - Indonesia
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- PTC India Limited - India
- Binh Thuan Hamico - Vietnam
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
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