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Wednesday, 24 December 14
MARKET INSIGHT - JOHN N. COTZIAS, INTERMODAL SNP BROKER
 The year is coming to an end, and we should be able to assess if this was a good year, a bad year, or even a lousy one? The answer clearly depends on where you stand… which was your bet-horse in other words.
The negative sentiment that has been prevailing in the dry bulk market lately leaves most owners with a rather bitter taste following the free fall of the past weeks. Enquiry levels remain low and we observe with great concern the everyday softening that takes place in the Capesize segment, with the BCI touching new historical lows daily, since its introduction in March 1999. In the past four weeks we have seen the index dropping from above 3,000 points to well below 500 points, while the average T/C for the segment has moved from $23,000/day to below $4,900/day. What a drop! If one considers that most Capes run their OPEX in excess of $10k/day and the level of CAPEX for those Capes acquired at 100mil USD then it goes without saying that some owners and their banks are facing hard times ahead. The drop in second-hand prices is also evident, with prices approaching the levels we witnessed back in December 2012 and January 2013, while every new deal is marking a lower last done, which is also the benchmark for the negotiation of the next sale candidate.
It was this time two years ago, in our brokers insight once more just before the Xmas holidays that we mentioned that we are facing low ship values that pose a great opportunity for anyone proceeding with purchases to possibly achieve an asset play. Buy low sell higher! And yes that was the case. Definitely we were no prophets, nor in a possession of a crystal bowl. It was just a clear observation of market fundamentals, and the shipping business cycles that always bring these spikes and enable investors to better ride the waves of the cycle.
So what are the fundamentals now? Bunker prices are at a 5 year low, the Japanese Yen reached a seven year low against the US Dollar, the Euro to the Dollar may be soon approaching 1.15 according to some, the Russian economy presently looks Rubbled... sorry meant troubled, iron ore prices are phenomenally low, China’s softening appetite in November has been weighing down on Capes and mineral export bans from Indonesia hurt further the Pacific trade. At the same time the scrap price offered in China is at $220-$230/ton and price levels have also been dropping sharply in the Indian Subcontinent. Most notably, the overall scrap activity for 2014 is 30% less than that of last year, while newbuilding ordering in 2014 is almost 50% down compared to 2013 levels.
A very simplistic approach says that during a bad market when freight rates suffer, the normal is that ship prices correct. Definitely some owners lose their sleep during this period, however others are seeing this as a golden opportunity to buy low, support their investment until rates improve and once their asset gains in value, lock in the profits. Bankers always say that a business proposal should be viable with all figures “adding-up” positively… however these proposals never take into account the value of asset play. A business deal in which you are buying low, is usually one taking place in a freight environment which doesn’t make sense for a banker to invest in, but is usually the one that will most probably offer the opportunity to asset play.
Fasten your seatbelt, the cycle ahead might be bumpy. My best and warmest wishes to all of you and all friends and colleagues that have been showing their continual support throughout the years.
” Kali Chronia” as we say in Greece!
By ohn N. Cotzias, Intermodal SnP Broker
Compiled by:
Intermodal Research & Valuations
Analysts:
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.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Friday, 05 December 14
CHINESE SPECIAL STEEL MAKERS' RISK PROFILES MORE RESILIENT - FITCH
Fitch Ratings says the risk profiles of Chinese makers of special steel, especially high-end products, are more like those of manufacturers and mor ...
Friday, 05 December 14
U.S. YEAR-TO-DATE COAL PRODUCTION REACHED AROUND 905 MMST - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19 million short tons (mmst) of coal i ...
Thursday, 04 December 14
CAPE MARKET IS DEVELOPING FROM BAD TO WORSE
Handy
The Atlantic market has been pretty stable and balanced this week, Fearnleys AS says in its latest weekly report.
The broker furt ...
Thursday, 04 December 14
DRY BULK MARKET; ANOTHER DISAPPOINTING WEEK
COALspot.com: For those who have been hoping to see alignment of freight direction across the Dry Bulk market, this must have been another disappoi ...
Wednesday, 03 December 14
PROGRESSING SMELTER PROJECTS IN INDONESIA
Press Release: Indonesia’s ban on ‘raw mineral export’ that was designed to encouraging downstream investment in mineral processi ...
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- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- The University of Queensland
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Planning Commission, India
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Anglo American - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Medco Energi Mining Internasional
- Kaltim Prima Coal - Indonesia
- Vedanta Resources Plc - India
- Commonwealth Bank - Australia
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Karbindo Abesyapradhi - Indoneisa
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- The Treasury - Australian Government
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Pendopo Energi Batubara - Indonesia
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Mercuria Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Price Waterhouse Coopers - Russia
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Sinarmas Energy and Mining - Indonesia
- Antam Resourcindo - Indonesia
- Chettinad Cement Corporation Ltd - India
- South Luzon Thermal Energy Corporation
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Jindal Steel & Power Ltd - India
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Makarim & Taira - Indonesia
- Georgia Ports Authority, United States
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- Madhucon Powers Ltd - India
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Malabar Cements Ltd - India
- Bulk Trading Sa - Switzerland
- Global Business Power Corporation, Philippines
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- VISA Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- Straits Asia Resources Limited - Singapore
- Miang Besar Coal Terminal - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Gujarat Sidhee Cement - India
- PowerSource Philippines DevCo
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Ministry of Transport, Egypt
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Indika Energy - Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
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