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Monday, 12 January 15
SHIPPING - CHALLENGES AND RESOLUTIONS - EVA TZIMA
 Last year has without a doubt been another challenging one both for both our industry and our country. As Greece is currently dominated by election fever, we cannot but wonder what sort of challenges we could be facing in 2015, while as the bitter sweet taste the performance of our industry left us with as 2014 ended is still strong, we look back to the activity of Greek owners last year together with what could be lying ahead for the different shipping markets this year.
Greek owners were reported as Buyers in 340 of the 2014 reported second-hand sales and as Sellers in 153 of them. This trend clearly shows that despite the volatility in the freight market, Greeks were still keen on snapping second-hand tonnage during the year. At the same time they have shown a clear preference on Japanese quality units, while the softening of asset prices that has been taking place since mid-year, has also helped SnP activity, which despite the challenging conditions of the market in 2014, remained pretty much at the same levels we saw back in 2013.
As far as the following months are concerned, and while the Dry Bulk market remains under pressure, we expect SnP activity for dry bulkers to considerably soften, as most owners will choose to sit on the sidelines until they have a more clear view of what’s coming ahead. On the tankers side, where things have been considerably more upbeat, we expect buying interest for crude carriers to remain stable overall at least for the first quarter of next year, while the recent popularity of MR and LR1 tonnage seems to be holding well, despite the fact that the long list of scheduled 2015 deliveries for the former are expected to weigh down on freight rates, fact which will most certainly scale back the current upside.
Out of the 2,874 newbuilding orders that were recorded during 2014, Greek owners were reported to be behind 127 of them, which is almost a 30% decrease compared to 2013 Greek orders. The new-building market has faced an extremely challenging year in terms of activity and this has been mostly attributed to the sharp fall in dry bulker orders compared to the previous year. Following the ordering spree of 2013, newbuilding prices remained on an upward trend for almost the entire first half of 2014 and despite the fact that the performance of the dry bulk freight market missed the expectations built up during the end of 2013. This has weighed down considerably on ordering interest for conventional vessels.
Prospects for next year remain dim. Despite the fact that prices currently stand well off the highs of January, most owners currently seem completely uninterested in revisiting the prospect of placing an order. On top of that, even in sectors that are currently enjoying some good earnings, the tonnage that is due to hit the water this year, is bound to put pressure on earnings and thus will further deter owners from heading back to the yards.
On the demolition front, 1,158 vessels in total were reported scrapped in 2014, a number significantly smaller compared to 2013. The percentage of Greek owned vessels that headed for scrapping remained stable nonetheless, showing that the mentality of getting rid of vintage tonnage and in most cases replacing it with modern one is still part of the Greek mentality. The demolition market was also under pressure last year. Following the intense scrapping activity of 2013, which in some cases created fairly “young fleets”, especially within size segments in the tanker sector, limited the volume of potential scrapping candidates. At the same time and despite the fact that demo prices were kept at significantly attractive levels during the first half of the year, most owners kept holding on to the hope of better freight rates during the last quarter of 2014, thus ruling out the demolition option. On top of that and even more importantly, as cheap Chinese scrap steel has been flooding the markets since the beginning of the summer, demo buyers in the Indian subcontinent were forced to lower their bids by more than $70/ldt in a very short period of time, making the demolition option even less attractive to owners of vintage tonnage. Despite the fact that steel demand remains overall healthy amongst breaker countries, we expect the negative trend of both demo volume and prices to resume next year, especially as any measures that could potentially set a floor on Chinese steel imports are being delayed.
At the beginning of every year, people make New Year’s resolutions. Perhaps the one for our industry should be to reinvent itself, which is always a task that requires hard work but in this case might be necessary in order to move ahead minimizing the extent to which our expectations are missed and the eventual disappointment to ourselves. Are we bound to witness rates achieved at the pick of last cycle for prolonged periods anytime soon? Probably not. But this doesn’t mean that there isn’t still value in operating ships today. I often hear that the entry of private equity in shipping in the past years has added to the often talked about oversupply of tonnage, but in my opinion this is not true. Private equity is actually behind a fairly small part of the funding that added the “extra” tonnage we are dealing with today. What non-traditional shipping players are responsible for though, is probably the change of mentality that made some in our industry eager to chase the quick asset play rather than operate a ship throughout its commercial life and gain from market conditions that could still bring along substantial profits. So let’s get back to the basics and hope that this won’t be a resolution that shares the same fate most New Year resolutions do...
Eva Tzima
Research Analyst
Compiled by:
Intermodal Research & Valuations
 About the Author
Eva Tzima has experience of more than a decade as a financial analyst and has focused on the shipping industry through private equity projects as well as maritime stock analysis. Since 2012 she has been working as a Research analyst at Intermodal Shipbrokers Co., where she currently holds the position of Head of Research, focusing in the specific analysis of the SnP, Newbuilding and Demolition markets across the Dry Bulk, Tanker, Container and Gas Carrier sectors.
Previous to her current post she worked as an investment manager for a privately owned portfolio and in Trafalgar Asset Managers Ltd in London, mainly focusing in Private Equity Projects in the shipping, energy and aircraft sectors, as well as in Primary and Secondary Debt investments. During her employment in Trafalgar she acted as a director across a number of boards of entities affiliated to Trafalgar.
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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Wednesday, 28 January 15
CAPES CONTINUED THEIR UPWARD MOVEMENT LAST WEEK - INTERMODAL
COALspot.com: The Dry Bulk market displayed a mirror performance of that of the week prior, with the Capesize market correcting further upwards and ...
Tuesday, 27 January 15
Q1 FOB INDONESIA COAL SWAP CLOSED AT $ 47.87 FOR WEEK ENDING JAN. 23
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 gain week over week and declined month on month.
The Q1 swap has decline US$ 0.9 ...
Tuesday, 27 January 15
Q2 FOB NEWCASTLE COAL SWAP UP 4.5% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery declined US$ 0.28 per MT (-0.54%) month over month and increased US$ 1.23 ( ...
Monday, 26 January 15
OVERSUPPLY, AMPLE STOCKPILES, AND LACKLUSTER UNDERLYING STEEL DEMAND KEPT COKING COAL PRICES LOW IN 2014
COALspot.com: Coking coal prices (FOB & CFR) fell 15% and 18% respectively during the year, amidst persistent oversupply, ample inventory and s ...
Monday, 26 January 15
FOB RICHARDS BAY Q2 COAL SWAP CLOSED LOWER THAN Q1 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q1' 2015 declined month over month and day on day.
The Q1 swap has fell ...
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- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Electricity Authority, New Zealand
- Edison Trading Spa - Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Bhoruka Overseas - Indonesia
- Malabar Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Interocean Group of Companies - India
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Ministry of Mines - Canada
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- IHS Mccloskey Coal Group - USA
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Bhatia International Limited - India
- Indian Energy Exchange, India
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Africa Commodities Group - South Africa
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Chamber of Mines of South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- Vizag Seaport Private Limited - India
- GAC Shipping (India) Pvt Ltd
- VISA Power Limited - India
- Directorate Of Revenue Intelligence - India
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- PTC India Limited - India
- PowerSource Philippines DevCo
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Thiess Contractors Indonesia
- South Luzon Thermal Energy Corporation
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Petron Corporation, Philippines
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Global Green Power PLC Corporation, Philippines
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- OPG Power Generation Pvt Ltd - India
- New Zealand Coal & Carbon
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Goldman Sachs - Singapore
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Altura Mining Limited, Indonesia
- Sojitz Corporation - Japan
- Australian Coal Association
- Timah Investasi Mineral - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Sindya Power Generating Company Private Ltd
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Bangladesh Power Developement Board
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Agrawal Coal Company - India
- Metalloyd Limited - United Kingdom
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- International Coal Ventures Pvt Ltd - India
- Medco Energi Mining Internasional
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