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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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Monday, 24 November 14
CHOPPY WATERS IN DRY BULK - SGX
COALspot.com: Dry bulk freight rates have experienced a sharp rise in volatility in recent weeks as bulk commodity supply has ramped up, said SGX i ...
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SPOT FREIGHT RATES IMPROVED SLIGHTLY OVER PREVIOUS WEEK
COALspot.com: The BDI was up 5.41 pct week on week and closed at 1,324 points on Friday. All the segments were up this week except Panamax index.&n ...
Sunday, 23 November 14
ITALY'S STEAM COAL IMPORTS TO DROP BY 11% IN 2014 - ASSOCARBONI
COALspot.com: Italy’s steam coal imports expected to drop to 16 million tons in 2014 (-11% compared to 2013); coking coal imports to plunge t ...
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- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- Australian Coal Association
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Kaltim Prima Coal - Indonesia
- ICICI Bank Limited - India
- Power Finance Corporation Ltd., India
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- The Treasury - Australian Government
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- International Coal Ventures Pvt Ltd - India
- Agrawal Coal Company - India
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Electricity Authority, New Zealand
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- PTC India Limited - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Oldendorff Carriers - Singapore
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Parliament of New Zealand
- Iligan Light & Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Karbindo Abesyapradhi - Indoneisa
- MS Steel International - UAE
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Indogreen Group - Indonesia
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Kumho Petrochemical, South Korea
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Central Java Power - Indonesia
- Africa Commodities Group - South Africa
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Malabar Cements Ltd - India
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Australian Commodity Traders Exchange
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Kobexindo Tractors - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- SMG Consultants - Indonesia
- Jindal Steel & Power Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bharathi Cement Corporation - India
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Parry Sugars Refinery, India
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Energy Development Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Latin American Coal - Colombia
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Mjunction Services Limited - India
- Borneo Indobara - Indonesia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
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