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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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Sunday, 20 July 14
THE FREIGHT MARKET CONTINUED ITS DOWNWARD TREND
COALspot.com: The market continued its downward trend this week as all segments were down compared to last week. The Cape and Panamax indices being ...
Friday, 18 July 14
3RD CHINA INTERNATIONAL SHALE GAS SUMMIT
Building on the massive success of the past 2 shale gas programs that has generated huge success by attracting 500+ industry players, and intrig ...
Friday, 18 July 14
US WEEKLY COAL PRODUCTION UP BY 1.4% TO 18.3 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 17 July 14
PANAMAX : MARKET HAS COOLED DOWN AGAIN TO LOW AND DEPRESSED LEVELS
Handy
The supra market remains pretty flat in the Atlantic while for the smaller sizes there has been little reported with ships chasing business ...
Thursday, 17 July 14
INDIAN GOVERNMENT WISE TO TAKE ADVANTAGE OF CURRENTLY LOW THERMAL COAL PRICES AND SHIPPING RATES - JEFFREY LANDSBERG
With thermal coal import prices (and also shipping rates) very low at present, India's government would be very wise to take advantage of curre ...
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- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- CNBM International Corporation - China
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- The State Trading Corporation of India Ltd
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Australian Coal Association
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Ministry of Finance - Indonesia
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Makarim & Taira - Indonesia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- The University of Queensland
- Therma Luzon, Inc, Philippines
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Malabar Cements Ltd - India
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Sakthi Sugars Limited - India
- Alfred C Toepfer International GmbH - Germany
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Coastal Gujarat Power Limited - India
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- White Energy Company Limited
- Interocean Group of Companies - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- VISA Power Limited - India
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Larsen & Toubro Limited - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- GAC Shipping (India) Pvt Ltd
- Medco Energi Mining Internasional
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate Of Revenue Intelligence - India
- India Bulls Power Limited - India
- Goldman Sachs - Singapore
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- ASAPP Information Group - India
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Thai Mozambique Logistica
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Sojitz Corporation - Japan
- Rashtriya Ispat Nigam Limited - India
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Krishnapatnam Port Company Ltd. - India
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Videocon Industries ltd - India
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Parliament of New Zealand
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
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