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