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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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Thursday, 25 July 13
CAPESIZE : PACIFIC AND ATLANTIC RATES ARE HOLDING STEADY - FEARNLEYS AS
Handy
The Far East market remains quiet even if some Indo coal trip orders were fed in the market at early this week. Prompt ships passing Singapor ...
Thursday, 25 July 13
SUMMER LULL CHIPPING AWAY RECENT GAINS IN DRY BULK FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In what seems to be establishing as a permanent trend, at least for the time being, the dry bulk market kept on retreating yesterday, even if this r ...
Tuesday, 23 July 13
NEWCASTLE'S COAL EXPORTS CLIMB 17.82% ON WEEK, PORT'S DATA SHOWS
COALspot.com: Newcastle port in Australia has loaded 3,369,865 tons of coal for the week ended 0700 hours 22 July 2013, Newcastle Port Corp. s ...
Monday, 22 July 13
DRY BULK MARKET DIFFICULT TO MAINTAIN POSITIVE DRIVE CLAIMS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has seen a significant recovery in recent weeks, leading most ship classes to earnings above their operating expenses, thus brin ...
Monday, 22 July 13
INDO COAL SWAP FOR AUGUST 13 DELIVERY GAINED ON WEEK BUT LOST ON DAY AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average August 2013 delivery slightly up on week but fell on day and month on Fri ...
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- ASAPP Information Group - India
- Semirara Mining and Power Corporation, Philippines
- Orica Mining Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Mjunction Services Limited - India
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Ministry of Mines - Canada
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Salva Resources Pvt Ltd - India
- Sojitz Corporation - Japan
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Posco Energy - South Korea
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Power Finance Corporation Ltd., India
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sakthi Sugars Limited - India
- Mintek Dendrill Indonesia
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Indika Energy - Indonesia
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Indogreen Group - Indonesia
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Larsen & Toubro Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Bukit Makmur.PT - Indonesia
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- GMR Energy Limited - India
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- The Treasury - Australian Government
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Kumho Petrochemical, South Korea
- South Luzon Thermal Energy Corporation
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Economic Council, Georgia
- White Energy Company Limited
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- MS Steel International - UAE
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
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