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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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Tuesday, 27 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMPED 15.59 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 15.59 per cent week on week to 2.76 million mt for ...
Monday, 26 August 13
CARRIAGE OF COAL CARGOES FROM KALIMANTAN, INDONESIA - WEST OF ENGLAND P&I CLUB
The Club has recently been advised by consulting scientists and engineers Dr J H Burgoyne and Partners (International) Limited that the number of in ...
Sunday, 25 August 13
API 8 CFR SOUTH CHINA COAL: HEADING TO NORTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 2.39 up month on month. The swap was moved positive ...
Sunday, 25 August 13
THE FREIGHT MARKET S7 & S8 SECTOR IS EXPECTED TO BE STEADY/FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market continued to be firm with all indices moved positive except for Panamax which was slightly down (2 pct down).
T ...
Friday, 23 August 13
US PRODUCED MORE COAL WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
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- Metalloyd Limited - United Kingdom
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Transport, Egypt
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- White Energy Company Limited
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Australian Coal Association
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Sakthi Sugars Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Binh Thuan Hamico - Vietnam
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Mjunction Services Limited - India
- Vedanta Resources Plc - India
- Jindal Steel & Power Ltd - India
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Grasim Industreis Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- GN Power Mariveles Coal Plant, Philippines
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- OPG Power Generation Pvt Ltd - India
- Eastern Coal Council - USA
- Mercator Lines Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indian Energy Exchange, India
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- GVK Power & Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Meenaskhi Energy Private Limited - India
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