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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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Monday, 01 July 13
12TH CLEAN COAL FORUM INDONESIA 2013
Press Release: Produced by CDMC Events, The 12th Clean Coal Forum Indonesia 2013 will be held on Dec 5-6,2013 in Jakarta, Indonesia. It will generat ...
Monday, 01 July 13
INDIA AND CHINA STILL DOMINATING THE INDONESIAN THERMAL COAL EXPORT MARKET
COALspot.com: Indonesia, the world's largest multi types coal exporter shipped 35.83* million tons of coal in May 2013, 1.40 per cent l ...
Sunday, 30 June 13
YEAR 2014 INDO SUB-BIT COAL SWAPS EXPECTED TO STAY BELOW 2013 LEVEL
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average August 2013 delivery have gained 0.08 percent on a day lost on week ...
Sunday, 30 June 13
CAPESIZE RATES SEEN INCREASING ON HIGH DEMAND - VISTAAR
COALspot.com - The BDI continued to rise and saw a big gain on Friday. BDI increased 14 per cent week ended 28 June 2013, closed at 1171 points driv ...
Friday, 28 June 13
U.S. PRODUCED 1.52 PERCENT LESS COAL WEEK ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.40 million short tons (mmst) of ...
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- Miang Besar Coal Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Malabar Cements Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- New Zealand Coal & Carbon
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- London Commodity Brokers - England
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Deloitte Consulting - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Gujarat Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Riau Bara Harum - Indonesia
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Lanco Infratech Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Bulk Trading Sa - Switzerland
- GMR Energy Limited - India
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- San Jose City I Power Corp, Philippines
- Indian Oil Corporation Limited
- Sree Jayajothi Cements Limited - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Cement Manufacturers Association - India
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Sakthi Sugars Limited - India
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Electricity Authority, New Zealand
- Mintek Dendrill Indonesia
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Sical Logistics Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Timah Investasi Mineral - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Maheswari Brothers Coal Limited - India
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- VISA Power Limited - India
- The University of Queensland
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Kideco Jaya Agung - Indonesia
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- Minerals Council of Australia
- Borneo Indobara - Indonesia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Bangladesh Power Developement Board
- Planning Commission, India
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Binh Thuan Hamico - Vietnam
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Essar Steel Hazira Ltd - India
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
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