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Wednesday, 09 July 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
 The mini-boom in dry bulker values catapulted ship prices too fast too far over the last one-and-a-half year. The concurrence of historically low prices in both second-hand and newbuilding markets, which approached the post Asian crisis lows in inflation-adjusted terms, offered the perfect background for asset play, but this is much easier said than done.
Most real-world buy-low-sell-higher cases concentrated on the flipping of newbuildings contracted at rock-bottom prices when we witnessed Handysize Newbuildings at sub-20musd levels, Ultramaxes at sub-24musd, Kamsarmaxes at rgn 26musd, and Capes at low-mid 40s. Notably, Cargill penned in May 2013 3x180kdwt Capes at SWS, acknowledging they would not operate these ships forever, and by the end of the same year sold them to Scorpio at 57musd each at a stunning rgn10musd profit per vessel. Oldendorff purchased a Crown-63 resale in late 2012 for mid-24s and after trading her, sold her for rgn31musd to Greeks. The same interests recently sold to Diana, a 180k Capesize resale under construction at Qingdao Beihai, for 58musd and a profit in excess of 10musd.
S&P-wise, the appreciation was spectacular on all dry asset classes last year. Regarding LME Panamaxes, ex-Ocean Planet (‘05 Sasebo) was committed in January 2013 by Chartworld at sub-m$15 while ex-Ocean Lily (’06 Imabari) was sold to Sanko close to 25musd this March, resulting in a 2/3 value appreciation in 14mos. While initial appreciation was substantiated, it went on irrationally (mimicry, artificial liquidity by the speculative funds, fear of ‘losing’ the market or even having money in the bank, taxation considerations, low interest rates, etc). On a few S&P asset play cases, in late 2012 Norwegian interests committed the 2006-built Tsuneishi Kamsarmax ex ‘Mizunagi Maru’ arnd 18.4musd and sold her a year later at 23.5musd to Greek interests enjoying a 5musd profit. Chinese owners also got on the bandwagon, having sold two late 90s Capes (m/v Lian Fu Star and m/v Tai Fu Star) to Ukrainians at mid/high teens recording a profit of rgn/xs 5musd per vessel in less than a year.
The current price correction is evidenced by the sale of the ‘Yusho Spica’ at rgn 20musd marked an abrupt 5musd discount from her same-year built sister ‘Ocean Lily’ 3 months ago. This brings asset values back to May 2013 when the ex-Shoyo (76k ’06 Namura) was sold at 20.25musd to Diana. Most likely, the current correction will not break soon the previous lows, because the costs of creating a new asset, ie, newbuilding prices, are well above previous lows and there are still many buyers/funds getting ready to step in, should a further correction in asset values occurs.
Well-timed acquisitions materialize when the others are fearful, when the banks do not lend money, when speculative money becomes disappointed. Nobody knows where we are heading but the recent past has benchmarked a lower bound for assets. As such, there may be longer-term value in modern S&P deals priced up to a 20% premium above the rock-bottom (e.g. a 2006/7 Japanese built Panamax BC at 18musd) and at a respective 10% premium for newbuildings (e.g., rgn/sub 29-30musd for Kamsa NBs from top Chinese yards). We may be getting close to there, but there are strong resistance forces as well.
Perhaps the wildest scenario would arise if the freight market stays depressed for another year and asset prices deteriorate further. What would then be the reaction of the speculative funds that, having a short-term investment horizon anyway, may massively look for an exit? In case this happens, it may signal the biggest asset play opportunity in the coming years.
By Panos Tsilingiris - SnP Broker
Analysts:
Mr. George Lazaridis
Ms. Eva Tzima
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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Thursday, 31 July 14
RIO TINTO SELLS MOZAMBIQUE COAL ASSETS FOR US$ 50 MILLION TO INDIA'S ICVL
COALspot.com: Rio Tinto has agreed to sell its Mozambique coal assets for just US$ 50 million to International coal ventures Private limited of Ind ...
Wednesday, 30 July 14
CAPES SEEMED TO BE STRANDED AT THE SAME LEVELS; PANAMAXES MANAGED TO SLIGHTLY REVIVE - INTERMODAL
COALspot.com: The Dry Bulk market took a breath this past week, as both Panamaxes and Supras started to see a small influx of activity, which was j ...
Tuesday, 29 July 14
TOTAL SELLS ITS SOUTH AFRICAN COAL MINING ASSETS TO EXXARO
Total has signed an agreement with Exxaro Resources Ltd for the sale of its 100% stake in Total Coal South Africa (TCSA), its coal-producing affili ...
Tuesday, 29 July 14
GENCO: DRY BULK SHIPPING VALUATIONS NO LONGER ANCHORED TO DISCOUNTED CASH FLOW METHOD - WEIL
KNOWLEDGE TO ELEVATE
Discounted cash flow analysis is a mainstay among the valuation methodologies used by restructuring professionals and bank ...
Tuesday, 29 July 14
SHIP OWNERS' DEMAND OF NEW VESSELS DENTED AS A RESULT OF LOWER FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The sharp downward direction of dry bulk freight rates has had a negative impact on investors’ secondhand buying appetite that wait to see th ...
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- Wood Mackenzie - Singapore
- PowerSource Philippines DevCo
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Power Finance Corporation Ltd., India
- Marubeni Corporation - India
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- The Treasury - Australian Government
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Planning Commission, India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Sakthi Sugars Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Eastern Energy - Thailand
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- IEA Clean Coal Centre - UK
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- San Jose City I Power Corp, Philippines
- International Coal Ventures Pvt Ltd - India
- Georgia Ports Authority, United States
- Indogreen Group - Indonesia
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- Independent Power Producers Association of India
- The University of Queensland
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Alfred C Toepfer International GmbH - Germany
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- White Energy Company Limited
- ICICI Bank Limited - India
- Sarangani Energy Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Merrill Lynch Commodities Europe
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- MS Steel International - UAE
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Medco Energi Mining Internasional
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
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