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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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- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Economic Council, Georgia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Ceylon Electricity Board - Sri Lanka
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Price Waterhouse Coopers - Russia
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Latin American Coal - Colombia
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Sinarmas Energy and Mining - Indonesia
- Power Finance Corporation Ltd., India
- Energy Development Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Ambuja Cements Ltd - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Renaissance Capital - South Africa
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Posco Energy - South Korea
- Indogreen Group - Indonesia
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- South Luzon Thermal Energy Corporation
- European Bulk Services B.V. - Netherlands
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Ministry of Finance - Indonesia
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- SN Aboitiz Power Inc, Philippines
- Borneo Indobara - Indonesia
- Dalmia Cement Bharat India
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Anglo American - United Kingdom
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- White Energy Company Limited
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Baramulti Group, Indonesia
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- India Bulls Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Central Java Power - Indonesia
- Indian Energy Exchange, India
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Aboitiz Power Corporation - Philippines
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