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Wednesday, 27 April 16
THE OCEAN SHIPPING EXPERIENCED DRAMATIC VOLATILITY IN THE BEGINNING OF 2016 - PANOS TSILINGIRIS
 Shipping’s new (ab)normal
The global economy and ocean shipping experienced dramatic volatility in the beginning of 2016 and as the global economy undergoes structural changes, so does the derived ocean shipping activity, principally epitomized by the following abnormal trends:
(i) Constrained financing,
(ii) Deflation in asset prices, and
(iii) Shift in demand growth.
Constrained financing
First, ship financing in all of its forms is very restricted and will remain so in the years to come. There has been just one shipping IPO this year raising a mere $7m! Following the 2008 financial crisis, the excessively detailed banking legislation enacted, has forced bankers to spend more time filling out forms for regulators rather than understanding better their clients and the industry.
Despite monetary expansion, banks are not lending the excess supply of money but rather hoarding it. If you think this scarcity of financing is temporary and that the implications of Basel III have already been felt, you are simply wrong. In 2018 we also anticipate the IFRS 9 to take effect contributing to earlier recognition of credit losses, making it more expensive and difficult for banks to lend. So, via upcoming regulations, deleveraging will intensify both in the west and in emerging markets. Only the best buyers will receive money, good luck to smaller companies!
Deflation in asset prices
Second, the cost of creating new shipping assets, i.e., shipbuilding prices, are low, will get lower and will remain low for some time. Shipping deflation is due to vast manufacturing overcapacity from the previous cycle and technological change. We will experience newbuilding prices lower than the 2012 ones which at the time represented multi-year lows.
The Japanese shipbuilding prices, the premium in the sector, are correcting thanks also to the Yen now standing at 111 a dollar vs. 76 in 2012, while Chinese Builders, the floor of shipbuilding values, offer aggressive pricing assisted by the Yuan devaluations.
In S. Korea, we expect consolidation and further correction of prices following the recent elections. The abovementioned lack of financing will keep newbuilding appetite subdued for long. This will further drive prices down. And since newbuilding prices are in a sense an upper bound for second-hand prices in normal freight conditions, asset prices will stay deflated endangering the plans of opportunistic asset players.
Shift in demand growth
Third, there is a shift in growth as we transition from an industrial into a services and consumer economy. GDP growth per se, especially if anemic as it stands today, will not suffice to generate strong seaborne demand. However, with limited financing we can’t anticipate anything exciting on the physical side. The historical correlations and >1 multipliers between GDP and seaborne trade documented over several decades have been broken the last years and specifically last year seaborne trade growth was outnumbered by GDP growth. There are fears that outsourcing and globalization are reaching their limits and there are early signs of near sourcing and nationalization. Fighting pollution will remain a long-term driver, with its implications on coal, oil and regulations. Gas is coming catalyzed by shale developments!
We have indeed a new shipping abnormal -with constrained financing, assets deflation and shift in demand- and it is likely to stay with us for long. On the rosy side, the first two trends, will alleviate the two major causes of the ongoing crisis: exogenous money and excessive yard capacity.
By Panos Tsilingiris
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 reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Friday, 29 April 16
U.S. COAL IMPORTS IN Q4' 15 DECLINED TO 2.7 MMST FROM 3 MMST IN Q3' 15
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.3 million short tons (mm ...
Thursday, 28 April 16
PRICES OF POWER-STATION COAL IN INDONESIA IS INCREASING
COALspot.com: Inquiries for Indonesian 4200 - 4400 Kcal/kg GAR thermal coal cargoes from India suddenly increase recent days.
A Jakarta-based ...
Thursday, 28 April 16
KOMIPO TO IMPORT 710K MT OF BITUMINOUS COAL DURING JULY - SEPTEMBER 2016
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 710,000 Metric Tons of Bituminous Coal for its B ...
Thursday, 28 April 16
CAPE: BIT MORE OPTIMISM IN THE MARKET; SUPRAMAX: FORWARD CURVE IS FALLING - FEARNLEYS
Cape
A bit of a slower week. Activity level has dropped, though the rates do still remain firm, says Fearnleys in its latest weekly report.
...
Wednesday, 27 April 16
INDONESIAN COAL MINER KIDECO REPORTED NET PROFIT OF US$138.1 MILLION IN 2015
COALspot.com: Kideco Jaya Agung, one of the Indonesia's leading coal miners has reported net profit of US$138.1 million on revenue of US$1.65 b ...
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- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Power Finance Corporation Ltd., India
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Meenaskhi Energy Private Limited - India
- Romanian Commodities Exchange
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Edison Trading Spa - Italy
- Pendopo Energi Batubara - Indonesia
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Grasim Industreis Ltd - India
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Coalindo Energy - Indonesia
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- VISA Power Limited - India
- Sical Logistics Limited - India
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Salva Resources Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Economic Council, Georgia
- Trasteel International SA, Italy
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kumho Petrochemical, South Korea
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Planning Commission, India
- PowerSource Philippines DevCo
- Commonwealth Bank - Australia
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Aboitiz Power Corporation - Philippines
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
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