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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, 27 June 13
US COAL EXPORTS BEATS CHINESE COAL IMPORTS AS THE MOST INFLUENTIAL COAL TRADE - BIMCO
The influence of American coal exports on seaborne transportation has grown significantly over the past decade. In 2002, the US exported 20.1 millio ...
Thursday, 27 June 13
HANDY : USD 12000 FOR SPOT COAL INDO/CHINA AND AROUND USD 13000 INDO/ECI - FEARNLEYS
Handy
Atlantic rates hold well. Continent to Far East is worth more than USD 14k daily whilst USG to Far East pay 23/24k a day. On the route from B ...
Thursday, 27 June 13
DRY BULK CARRIERS DOMINATE NEWBUILDING ORDERS AS SHIP OWNERS ARE ENCOURAGED BY LATEST FREIGHT RATE RALLY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Newbuilding orders for dry bulk carriers were already high, compared to last year, prior to the latest rally of the Baltic Dry Index (BDI), which ha ...
Tuesday, 25 June 13
CAPESIZE MARKET TO REMAIN BULLISH SAYS ANALYST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been experiencing its long-awaited rally, with the Baltic Dry Index, the industry's benchmark rising to healthier levels fo ...
Tuesday, 25 June 13
NEWCASTLE PORT SHIPPED OUT MORE COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 3,101,378 tons of coal for the week ended 0700 hours 24 June 2013, Newcastle Port Corp. ...
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- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- SMG Consultants - Indonesia
- Samtan Co., Ltd - South Korea
- Meenaskhi Energy Private Limited - India
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- Heidelberg Cement - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Coalindo Energy - Indonesia
- The State Trading Corporation of India Ltd
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Parry Sugars Refinery, India
- Bulk Trading Sa - Switzerland
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- Therma Luzon, Inc, Philippines
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Singapore Mercantile Exchange
- TeaM Sual Corporation - Philippines
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- Posco Energy - South Korea
- Neyveli Lignite Corporation Ltd, - India
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Kideco Jaya Agung - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- VISA Power Limited - India
- GMR Energy Limited - India
- Bhatia International Limited - India
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Kobexindo Tractors - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Mercator Lines Limited - India
- Kapuas Tunggal Persada - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bharathi Cement Corporation - India
- The Treasury - Australian Government
- Oldendorff Carriers - Singapore
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Karaikal Port Pvt Ltd - India
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ceylon Electricity Board - Sri Lanka
- Ambuja Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Australian Coal Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- Maheswari Brothers Coal Limited - India
- McConnell Dowell - Australia
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Directorate Of Revenue Intelligence - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Coal and Oil Company - UAE
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Wilmar Investment Holdings
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- ICICI Bank Limited - India
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- LBH Netherlands Bv - Netherlands
- Vedanta Resources Plc - India
- The University of Queensland
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
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