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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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Friday, 19 July 13
U.S.COAL PRODUCTION TOTALED APPROXIMATELY 19.60 MMST WEEK ENDED JULY 13
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.60 million short tons (mmst) of ...
Friday, 19 July 13
TNPL IS LOOKING FOR 300 K MT OF 6000 GAD COAL FOR FIVE MONTH
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 5 shipments about 60,0 ...
Thursday, 18 July 13
3RD ANNUAL FLOATING TERMINALS, INDONESIA
Commercial applications for offshore transshipment facilities
Floating Terminal solutions are increasingly being deployed by miners, independent ...
Thursday, 18 July 13
THE CAPE MARKET APPEARS TO BE HOLDING FIRM - FEARNLEYS AS
Handy
In the Pacific, market maintained similar levels during the week. There is several Indo coal orders in the market, ships passing Singapore fi ...
Thursday, 18 July 13
DRY BULK MARKETS RETAINS RECENT GAINS, MOVES SIDEWAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on moving sideways this week, as evidenced by the latest trends of the industry's benchmark, the Baltic Dry Index (BDI ...
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- Maheswari Brothers Coal Limited - India
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Toyota Tsusho Corporation, Japan
- Vedanta Resources Plc - India
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Holcim Trading Pte Ltd - Singapore
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
- Energy Development Corp, Philippines
- Australian Coal Association
- The State Trading Corporation of India Ltd
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Straits Asia Resources Limited - Singapore
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- Bangladesh Power Developement Board
- Mintek Dendrill Indonesia
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- London Commodity Brokers - England
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Bhushan Steel Limited - India
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- Singapore Mercantile Exchange
- The Treasury - Australian Government
- The University of Queensland
- Sree Jayajothi Cements Limited - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Salva Resources Pvt Ltd - India
- CNBM International Corporation - China
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Merrill Lynch Commodities Europe
- Timah Investasi Mineral - Indoneisa
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Kapuas Tunggal Persada - Indonesia
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GVK Power & Infra Limited - India
- Formosa Plastics Group - Taiwan
- Madhucon Powers Ltd - India
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Sakthi Sugars Limited - India
- PTC India Limited - India
- Indian Energy Exchange, India
- Gujarat Sidhee Cement - India
- MS Steel International - UAE
- Binh Thuan Hamico - Vietnam
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Star Paper Mills Limited - India
- Dalmia Cement Bharat India
- Rashtriya Ispat Nigam Limited - India
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Minerals Council of Australia
- VISA Power Limited - India
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
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