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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.
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Tuesday, 02 December 14
FOB RICHARDS BAY COAL SWAPS LOST MONTH OVER MONTH
COALspot.com: API 4 FOB Richards Bay Coal for delivery Q1' 2015 lost month on month, week on week and day over day.
The Q1 swap has lost U ...
Tuesday, 02 December 14
SUB-BIT FOB INDONESIA COAL Q1' 15 DELIVERY SWAP CLOSED AT US$ 49.50
COALspot.com: Indonesian coal swaps for delivery Q1' 2015 lost month on month, week over week and day on day.
The Q1 swap has lost US$ 0.4 ...
Monday, 01 December 14
SGX'S FOB NEWCASTLE COAL SWAP FOR Q1' 2015 DELIVERY CLOSED AT US$ 52.50
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery closed at US$ 52.50 on 28 November after losing US$ 1.20 (-2.23%) month ove ...
Monday, 01 December 14
Q2' 15 DELIVERY CFR SOUTH CHINA COAL SWAP CLOSED 0.42% LOWER THAN Q1' 15 DELIVERY CLOSING
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased US$ 2.45 (-3.78%) month over month and US$ 0.67 (-1.06%) we ...
Sunday, 30 November 14
SUPRAMAX COAL FREIGHT RATES FROM INDONESIA TO INDIA : FIRM
COALspot.com: The BDI fell 171 points and closed at 1153 points on Friday 28 November 2014. The Cape index also lost 887 points and closed at 2151 ...
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- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Therma Luzon, Inc, Philippines
- White Energy Company Limited
- Videocon Industries ltd - India
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Meralco Power Generation, Philippines
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Grasim Industreis Ltd - India
- Larsen & Toubro Limited - India
- Directorate Of Revenue Intelligence - India
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Planning Commission, India
- Energy Link Ltd, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- Latin American Coal - Colombia
- TNB Fuel Sdn Bhd - Malaysia
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Medco Energi Mining Internasional
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- The University of Queensland
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Ministry of Transport, Egypt
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Metalloyd Limited - United Kingdom
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Siam City Cement PLC, Thailand
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
- GMR Energy Limited - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Price Waterhouse Coopers - Russia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Jindal Steel & Power Ltd - India
- Energy Development Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Chettinad Cement Corporation Ltd - India
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Goldman Sachs - Singapore
- Sinarmas Energy and Mining - Indonesia
- Bhoruka Overseas - Indonesia
- London Commodity Brokers - England
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- Sical Logistics Limited - India
- Star Paper Mills Limited - India
- Savvy Resources Ltd - HongKong
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- VISA Power Limited - India
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Eastern Coal Council - USA
- Essar Steel Hazira Ltd - India
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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