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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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Wednesday, 23 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
In Australia, the world’s largest mining group, BHP Billiton, will beat the iron ore export target of more than 220 million tonnes for 2014. ...
Wednesday, 23 July 14
HARD COAL 2013: THE WORLD'S SECOND-MOST IMPORTANT ENERGY SOURCE AND GUARANTOR FOR THE SECURITY OF ENERGY SUPPLIES DURING TIMES OF CRISIS
Hard coal is again in 2013 the fastest-growing fossil primary energy source in the world. As shown in the BP Statistical Review 2014, it covered ab ...
Tuesday, 22 July 14
INDONESIAN ELECTION RESULT ENCOURAGING FOR FOREIGN INVESTMENT IN ENERGY AND MINING SECTORS - WOOD MACKENZIE
Joko Widodo-Jusuf Kalla has been announced as the official winner of Indonesia's presidential election. Joko Widodo, or Jokowi, is viewed as a ...
Tuesday, 22 July 14
THE CURRENT COAL PRICES ARE UNPROFITABLE FOR MINERS; COAL PRICES WILL GRADUALLY INCREASE - FITCH
COALspot.com: The Fitch Ratings expect the benchmark Newcastle coal prices (currently at about USD70/MT) to gradually increase.
Fitch's la ...
Tuesday, 22 July 14
SUB-BIT FOB INDONESIA COAL Q3' 14 DOWN 5.21%; Q4' 14 DOWN 3.56%; Q1' 15 DOWN 4.75% M-O-M
COALspot.com: Indonesian coal swaps for average Q3’ 2014 flat on day, weak week on week and on month according to AsiaClear OTC coal swap' ...
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- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Eastern Coal Council - USA
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Eastern Energy - Thailand
- Gujarat Electricity Regulatory Commission - India
- Asmin Koalindo Tuhup - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Baramulti Group, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Kalimantan Lumbung Energi - Indonesia
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Edison Trading Spa - Italy
- Jaiprakash Power Ventures ltd
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Price Waterhouse Coopers - Russia
- Therma Luzon, Inc, Philippines
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Deloitte Consulting - India
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- White Energy Company Limited
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- Standard Chartered Bank - UAE
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Central Electricity Authority - India
- Africa Commodities Group - South Africa
- Minerals Council of Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- IEA Clean Coal Centre - UK
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Global Coal Blending Company Limited - Australia
- Lanco Infratech Ltd - India
- Planning Commission, India
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Indonesian Coal Mining Association
- Kepco SPC Power Corporation, Philippines
- Economic Council, Georgia
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Global Business Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Mercator Lines Limited - India
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Miang Besar Coal Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- Bulk Trading Sa - Switzerland
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Orica Mining Services - Indonesia
- The University of Queensland
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Central Java Power - Indonesia
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Semirara Mining Corp, Philippines
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
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