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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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Saturday, 10 August 13
MOODY'S: OUTLOOK FOR US COAL INDUSTRY CHANGES TO STABLE FROM NEGATIVE
Moody's Investors Service has changed its outlook for the US coal industry to stable from negative, the rating agency says in a new report, "U ...
Saturday, 10 August 13
DEMOLITION ACTIVITY TO BE CRUCIAL AGAIN IN PROVIDING SUPPORT TO THE DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
We appear to have forgotten demolition activity this year, with the Baltic Dry Index gaining traction in the latter part of the second half and emer ...
Friday, 09 August 13
US PRODUCED 4.00 PERCENT LESS COAL ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.00 million short tons (mmst) of ...
Thursday, 08 August 13
HANDY : NO POSITIVE SENTIMENT FOR THE FAR EAST MARKET - FEARNRESEARCH
Handy
No positive sentiment for the Far East market. There are a number of ships coming open in SE Asia this week and owners rating mid/high USD 8k ...
Thursday, 08 August 13
MALAYSIA HOSTS THIRD ANNUAL ASIAN SUB-BITUMINOUS COAL USERS' GROUP CONFERENCE
Press Release : The third Annual Asian Sub-Bituminous Coal Users’ Group (ASBCUG) conference convenes Sept. 30-Oct. 3 at the Eastern & Orie ...
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- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Goldman Sachs - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Planning Commission, India
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Kumho Petrochemical, South Korea
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Kartika Selabumi Mining - Indonesia
- Therma Luzon, Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
- PNOC Exploration Corporation - Philippines
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Energy Link Ltd, New Zealand
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Central Java Power - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Deloitte Consulting - India
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Ministry of Finance - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Oldendorff Carriers - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Australian Coal Association
- Madhucon Powers Ltd - India
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- Aditya Birla Group - India
- McConnell Dowell - Australia
- MS Steel International - UAE
- Eastern Energy - Thailand
- Ministry of Transport, Egypt
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Edison Trading Spa - Italy
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- SMG Consultants - Indonesia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- GN Power Mariveles Coal Plant, Philippines
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Miang Besar Coal Terminal - Indonesia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Mjunction Services Limited - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Sical Logistics Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- The University of Queensland
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
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