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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, 12 July 13
U.S. PRODUCED 18.40 MMST COAL WEEK ENDED 6 JULY 2013
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 18.40 million short tons (mmst) of ...
Thursday, 11 July 13
PANAMAX: PACIFIC ROUND PAY AROUND $6,500/D; ATLANTIC ROUND VOYAGE PAY AROUND US$ 10,000/D - FEARNLEYS AS
Handy
The Feast market is quiet, July date cargoes remain unfixed as there is a gap between what owners aiming and charterers willing to pay. There ...
Wednesday, 10 July 13
DRY BULK MARKET IS STILL STRUGGLING TO SURVIVE - INTERMODAL
COALspot.com : With the first half of the year now behind us and, as expected, most shipping segments in the dry bulk market are struggling to survi ...
Tuesday, 09 July 13
COAL PRICE REMAINS SLUGGISH - TRIMEGAH
COALspot.com - Newcastle coal price has reached US$ 76.30/ton (-15.9% YTD), bringing YTD’13 average to stand at US$ 87.90/ton, 6.80% lower tha ...
Tuesday, 09 July 13
NEWCASTLE COAL EXPORTS JUMP 27.53% ON WEEK TO 2.97 MILLION MT
COALspot.com - Newcastle Coal exports up 27.53% to 2.97 million tons W-o-W.
Newcastle port in Australia has loaded 2,974,715 tons of coal for the ...
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- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Bukit Baiduri Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Therma Luzon, Inc, Philippines
- Wilmar Investment Holdings
- Planning Commission, India
- Neyveli Lignite Corporation Ltd, - India
- ASAPP Information Group - India
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- New Zealand Coal & Carbon
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Ministry of Finance - Indonesia
- Wood Mackenzie - Singapore
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Trasteel International SA, Italy
- Australian Coal Association
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Marubeni Corporation - India
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- The University of Queensland
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- CNBM International Corporation - China
- GVK Power & Infra Limited - India
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Leighton Contractors Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Coastal Gujarat Power Limited - India
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Antam Resourcindo - Indonesia
- London Commodity Brokers - England
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Indo Tambangraya Megah - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Orica Mining Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Energy Link Ltd, New Zealand
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Aditya Birla Group - India
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Bahari Cakrawala Sebuku - Indonesia
- Mjunction Services Limited - India
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