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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, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
Monday, 12 August 13
GBCE SUCCESSFUL IN UPGRADING LOW RANK INDONESIAN COAL ON INDUSTRIAL SCALE
COALspot.com : GB Clean Energy Ltd. (GBCE) has annoused that, the company has successfully upgraded 2,426 tonnes of low rank 4,018 kcal NAR Ind ...
Monday, 12 August 13
INDIA - SAFE SHIPMENT OF IRON ORE FINES FROM INDIAN PORTS - WEST OF ENGLAND P&I CLUB
As Members may be aware, in 2009 two ships, the ‘Asian Forest’ and the ‘Black Rose’, capsized and sank following the liquefa ...
Sunday, 11 August 13
INDONESIAN COAL SWAPS : FLAT ON DAY
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery flat on day due to holidays in Indonesia, Malaysia & ...
Sunday, 11 August 13
SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA CONTINUED TO BE SOFT - VISTAAR
COALspot.com : The freight market was soft this week with all indices down , the reason could be long weekend holidays in Indonesia, Singapore and M ...
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- Sindya Power Generating Company Private Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- White Energy Company Limited
- CNBM International Corporation - China
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- Economic Council, Georgia
- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Eastern Coal Council - USA
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Leighton Contractors Pty Ltd - Australia
- Indian Energy Exchange, India
- Indo Tambangraya Megah - Indonesia
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- VISA Power Limited - India
- ASAPP Information Group - India
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Tamil Nadu electricity Board
- Ceylon Electricity Board - Sri Lanka
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thai Mozambique Logistica
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Anglo American - United Kingdom
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Global Green Power PLC Corporation, Philippines
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Pendopo Energi Batubara - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- SMC Global Power, Philippines
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Sakthi Sugars Limited - India
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Electricity Authority, New Zealand
- Indian Oil Corporation Limited
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Maheswari Brothers Coal Limited - India
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Coastal Gujarat Power Limited - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Antam Resourcindo - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Kobexindo Tractors - Indoneisa
- Global Business Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
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