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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, 16 July 14
INDIA BUDGET HAS LIMITED SHORT TERM IMPACT ON POWER SECTOR - FITCH RATINGS
Fitch Ratings says that the measures announced relating to India's electricity sector in the budget for FY2015 are directionally correct but in ...
Wednesday, 16 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
Wake me up when September ends - Theodore Ntalakos
Since last September most thought that the worst was behind us. It looks like the market de ...
Tuesday, 15 July 14
INDONESIA'S TOTAL COAL PRODUCTION REACHED ANOTHER HIGH DURING THE FIRST SIX MONTHS; GOVERNMENT EXPECTED TO RAISE ROYALTIES
COALspot.com: Indonesia's total coal production reached 213 million tons during January through June, up by 7.6 percent y-o-y. Coal output in I ...
Monday, 14 July 14
THE END OF THE ERA OF HEAVY FUEL OIL IN MARITIME SHIPPING - ICCT
KNOWLEDGE TO ELEVATE
Since the 1960s, heavy fuel oil (HFO) has been the king of marine fuels. Viscous, dirty, yet inexpensive and widely avail ...
Monday, 14 July 14
SGX SUB-BIT FOB INDONESIA COAL SWAP FOR Q4' 14 DELIVERY CLOSED AT $ 54.80
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
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- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Aditya Birla Group - India
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- San Jose City I Power Corp, Philippines
- Central Java Power - Indonesia
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Ministry of Transport, Egypt
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Riau Bara Harum - Indonesia
- Oldendorff Carriers - Singapore
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Goldman Sachs - Singapore
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Port Waratah Coal Services - Australia
- Coal and Oil Company - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- MS Steel International - UAE
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Anglo American - United Kingdom
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- CIMB Investment Bank - Malaysia
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Xindia Steels Limited - India
- Parliament of New Zealand
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- PTC India Limited - India
- Siam City Cement PLC, Thailand
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Economic Council, Georgia
- Pendopo Energi Batubara - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Manunggal Multi Energi - Indonesia
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Interocean Group of Companies - India
- Metalloyd Limited - United Kingdom
- Bhoruka Overseas - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- New Zealand Coal & Carbon
- Planning Commission, India
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Africa Commodities Group - South Africa
- Renaissance Capital - South Africa
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
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