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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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Thursday, 05 September 13
DRY BULK MARKET ON A HIGH ROLL, MAINLY THANKS TO CAPESIZE APPETITE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Capesize owners have been rejoycing on the back of renewed optimism for the further rise in the dry bulk market's freight rates, especially when on ...
Wednesday, 04 September 13
RBCT SHIPPED 16.18 PERCENT MORE COAL IN JULY
COALspot.com - Richards Bay Coal Terminal (RBCT) is the single largest coal export terminal South African as well as in the world has shipped 6,162, ...
Wednesday, 04 September 13
SUPRAS AND HANDIES : INDONESIAN COAL CARGOES ARE SUPPORTING HEALTHY ACTIVITY LEVELS - INTERMODAL
The Dry Bulk market has pooled back a bit this week after firming for two weeks in a row. The BDI is s holding above 1,100 points and despite the sm ...
Tuesday, 03 September 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 22.93 PER CENT MORE COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 22.93 per cent week on week to 3.39 million mt for ...
Sunday, 01 September 13
COAL SWAP SHOWS MIXED TREND
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery 1.25 percent up month on month. The swap was moved posit ...
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- Trasteel International SA, Italy
- GN Power Mariveles Coal Plant, Philippines
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Uttam Galva Steels Limited - India
- PTC India Limited - India
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Vedanta Resources Plc - India
- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- Neyveli Lignite Corporation Ltd, - India
- IHS Mccloskey Coal Group - USA
- Romanian Commodities Exchange
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- AsiaOL BioFuels Corp., Philippines
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Pendopo Energi Batubara - Indonesia
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Gujarat Sidhee Cement - India
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- The University of Queensland
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Sree Jayajothi Cements Limited - India
- Kartika Selabumi Mining - Indonesia
- Global Coal Blending Company Limited - Australia
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Riau Bara Harum - Indonesia
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Central Electricity Authority - India
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- Marubeni Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Posco Energy - South Korea
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Australian Commodity Traders Exchange
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Cigading International Bulk Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bhushan Steel Limited - India
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
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