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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, 04 August 13
COAL SWAP MARKET HAS LOST DIRECTION; STRUGGLING TO CATCH UP
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average October 2013 delivery slightly down on day, week and month on Friday, 2 A ...
Sunday, 04 August 13
INDONESIA TO INDIA SUPRAMAX FREIGHT SOFT DUE TO HOLIDAYS IN INDONESIA - VISTAAR
COALspot.com : The freight market was fairly steady this week with the BDI recovering towards north since second half of the week with the support o ...
Friday, 02 August 13
DRY BULK MARKET STABILIZES ON RENEWED MARKET ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its positive footing this week, although it's still a far cry to deem the market situation as a growing one, especiall ...
Friday, 02 August 13
ASIA ACCOUNTS FOR 27.95 PERCENT OF US COAL EXPORTS IN Q1, 2013
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
Thursday, 01 August 13
CAPESIZE: THE FLOW OF CARGOES REMAINS RELATIVELY STABLE, AND THE PACIFIC IS LOOKING PROMISING - FEARNLEYS AS
Handy
The Pacific market is still facing low activity, so no wonder that the tonnage list is getting longer. It´s still Ramadan and only a fe ...
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- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Siam City Cement PLC, Thailand
- Pendopo Energi Batubara - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Minerals Council of Australia
- Sical Logistics Limited - India
- Australian Coal Association
- Pipit Mutiara Jaya. PT, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- South Luzon Thermal Energy Corporation
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- The University of Queensland
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Wilmar Investment Holdings
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Mjunction Services Limited - India
- GMR Energy Limited - India
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Port Waratah Coal Services - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Energy Development Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Vijayanagar Sugar Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Indonesian Coal Mining Association
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Star Paper Mills Limited - India
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- Maheswari Brothers Coal Limited - India
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- Standard Chartered Bank - UAE
- Eastern Energy - Thailand
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Romanian Commodities Exchange
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Ind-Barath Power Infra Limited - India
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Parliament of New Zealand
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