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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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Friday, 25 July 14
U.S WEEKLY COAL PRODUCTION UP AROUND 3.5% WEEK ENDED JULY 19
COALspot.com – United States the world's second largest coal producer, produced approximately 19.00 million short tons (mmst) of coal in ...
Thursday, 24 July 14
INDONESIA'S JUNE 2014 COAL EXPORT VOLUME DOWN 6.82%; AVERAGE SELLING PRICE DOWN
COALspot.com: Indonesia, one of the world's largest coal producer and the global leading multi grade coal exporter shipped around $1.70* ...
Thursday, 24 July 14
HANDY: SOUTH AFRICA SOFTENED A BIT, HERE RATES ARE AT AROUND 8K +150K BB FOR TRIPS EAST - FEARNLEYS AS
Handy
The handy market in the Atlantic is going sideways and a tick down on low activity. Levels hoovering around USD 5k on Supras. The SMX marke ...
Thursday, 24 July 14
INDONESIAN COAL EXPORTERS ARE REQUIRED TO OBTAIN ET-BATUBARA UNDER LATEST TRADE MINISTRY'S NEW REGULATION
COALspot.com: Indonesia's trade ministry has issued regulation No. 39/M-DAG/PER/7/2014 which is requires exporters of power plant coal as ...
Wednesday, 23 July 14
PANAMAXES WERE BACK ON A DOWNWARD COURSE; CAPES WERE FEELING THE MOST PRESSURE - INTERMODAL
COALspot.com: The Dry Bulk market was on a downward spiral this week, with the BDI noting another week-on-week decline of the magnitude of 10% this ...
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- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- London Commodity Brokers - England
- Kobexindo Tractors - Indoneisa
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Aditya Birla Group - India
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Vedanta Resources Plc - India
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Sree Jayajothi Cements Limited - India
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Mercuria Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- GMR Energy Limited - India
- Ambuja Cements Ltd - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Marubeni Corporation - India
- AsiaOL BioFuels Corp., Philippines
- Siam City Cement PLC, Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- The University of Queensland
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Sical Logistics Limited - India
- Indo Tambangraya Megah - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhoruka Overseas - Indonesia
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Ministry of Mines - Canada
- Eastern Energy - Thailand
- Sarangani Energy Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
- Gujarat Sidhee Cement - India
- Antam Resourcindo - Indonesia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Vizag Seaport Private Limited - India
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Central Electricity Authority - India
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Lanco Infratech Ltd - India
- Metalloyd Limited - United Kingdom
- Kepco SPC Power Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Siam City Cement - Thailand
- Interocean Group of Companies - India
- Bangladesh Power Developement Board
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Jaiprakash Power Ventures ltd
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Coalindo Energy - Indonesia
- Bhatia International Limited - India
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Mercator Lines Limited - India
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
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