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