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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, 18 August 13
SUB-BIT FOB INDONESIA COAL SWAP : ON POSITIVE DIRECTION ON DAY, WEEK AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 1.83 up month on month. The swap was moved positive ...
Sunday, 18 August 13
INDO - INDIA FREIGHT EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market was up this week with the BDI gaining more than 10 pct due to strong Cape Sector.
The BDI was closed at 1,102 p ...
Friday, 16 August 13
US COAL PRODUCTION SLIGHTLY UP ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.10 million short tons (mmst) of ...
Thursday, 15 August 13
CAPESIZE : TRENDS SOMETIMES SHIFT WITH NO PRIOR WARNING - FEARNRESEARCH
Handy
The influence of the summer holidays across Europe was felt in the Atlantic basin this week. Very little activity and a growing list of avail ...
Wednesday, 14 August 13
ANOTHER WEEK IN THE RED FOR DRY BULK CARRIERS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable- )
Another week in the red for Dry Bulk carriers with the market losing further steam as fewer an ...
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- GN Power Mariveles Coal Plant, Philippines
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Independent Power Producers Association of India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Planning Commission, India
- Orica Mining Services - Indonesia
- TeaM Sual Corporation - Philippines
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- VISA Power Limited - India
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Uttam Galva Steels Limited - India
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Ministry of Mines - Canada
- Formosa Plastics Group - Taiwan
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Simpson Spence & Young - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Indian Oil Corporation Limited
- Gujarat Sidhee Cement - India
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- GVK Power & Infra Limited - India
- Riau Bara Harum - Indonesia
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- New Zealand Coal & Carbon
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Sical Logistics Limited - India
- Cigading International Bulk Terminal - Indonesia
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Mintek Dendrill Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Pendopo Energi Batubara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Central Electricity Authority - India
- White Energy Company Limited
- ICICI Bank Limited - India
- CNBM International Corporation - China
- PTC India Limited - India
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Directorate General of MIneral and Coal - Indonesia
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