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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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Sunday, 01 September 13
INDONESIA TO INDIA SPOT FREIGHT STAYS FIRM THIS WEEK - VISTAAR
COALspot.com: The freight market continued to be firm with even though the BDI and Cape index dropped by about 3 pct week on week.
The BDI was do ...
Friday, 30 August 13
US COAL PRODUCTION FELL 0.48 PERCENT WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.70 million short tons (mmst) of ...
Thursday, 29 August 13
HANDY: THE PACIFIC MARKET STARTED HEALTHY THIS WEEK - FEARNRESEARCH
Handy
The Pacific market started healthy this week. We have seen many bauxite, iron ore and few coal fixtures. Ships passing Singapore were able to ...
Thursday, 29 August 13
NO RATING IMPACT ON INDONESIAN ENERGY COMPANIES FROM RUPIAH DEPRECIATION - FITCH RATINGS
Fitch Ratings says the credit profiles of rated Indonesian energy and utilities companies, including thermal coal producers, will largely remain una ...
Wednesday, 28 August 13
THE BDI HAS MOVED TO LEVELS CONSIDERABLY STRONGER THAN THE BEGINNING OF THE YEAR - INTERMODAL
By George Bassakos
SnP Broker - Intermodal
We have already reached the end of August and whilst students are preparing themselves for another sc ...
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- Riau Bara Harum - Indonesia
- Tamil Nadu electricity Board
- McConnell Dowell - Australia
- LBH Netherlands Bv - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
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- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- The Treasury - Australian Government
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bulk Trading Sa - Switzerland
- Kaltim Prima Coal - Indonesia
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
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- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Independent Power Producers Association of India
- Formosa Plastics Group - Taiwan
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- PTC India Limited - India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- London Commodity Brokers - England
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Chettinad Cement Corporation Ltd - India
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- White Energy Company Limited
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Barasentosa Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Romanian Commodities Exchange
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Planning Commission, India
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- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Electricity Generating Authority of Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sree Jayajothi Cements Limited - India
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
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- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
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- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Mercuria Energy - Indonesia
- The University of Queensland
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- Leighton Contractors Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- MS Steel International - UAE
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Malabar Cements Ltd - India
- Australian Coal Association
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Sical Logistics Limited - India
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Central Java Power - Indonesia
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Central Electricity Authority - India
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Kideco Jaya Agung - Indonesia
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Timah Investasi Mineral - Indoneisa
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thai Mozambique Logistica
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