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Wednesday, 03 August 16
SHIPPING MARKET INSIGHT - EVA TZIMA
 The Good…
Demand. Amidst all the unprecedented geopolitical turmoil and shifts in the likes of Brexit, the IMF lowered last month its global growth expectations but as far as growth in emerging market and developing economies is concerned, expectations were unaffected. 2016 is still expected to be the first year since 2010 that growth in these countries will pick up and this is great news for the dry bulk market, as these economies, accounting for more than 70% of global growth, are also the main drivers of dry bulk shipping.
The Bad…
Supply. A lot of hopes have been generated from scrapping activity in bigger sizes this year but the truth is that we still have a long way to go before tonnage supply gets down to a level that it can meaningfully support earnings. Let’s look at some figures in the >120,000dwt range. These vessels accounted for 295.07m dwt in January, while today, despite all the intense scrapping we are only down to 294.87m., which means that cancellations and slippage made little difference once some of the scheduled deliveries kicked in. Adding to that the 12.00m dwt that have been ordered since January (30 Valemaxes) against the 11.94m dwt that have been scrapped during the same period and the answer to the “Are we there yet?” question becomes not just a simple “Not yet.” but rather a big fat “Not even close”.
And the Ugly.
Overlapping. Ultramaxes, Kamsarmaxes, Post-Panamaxes.
Can we create a new size called Evamax please?
Was the dry bulk trade actually in need of these sizes or has the market been getting ahead of itself since the last shipping boom? Fact; as designs evolve, ships change in both their efficiency and size. But then again shouldn’t the latter be a long-term process during which the fleet of the older size gets to substantially decrease? And much more importantly a process during which actual demand and consequently charterers and traders dictate parcel size needs much more than shipbuilders? It is no wonder that the poor old Panamax has been squeezed from both below (Ultramaxes) and above (Kamsarmaxes) in the dwt range, while the modern Post-Panamax fleet has been also striving to survive, simultaneously chocking those already battered Capesize margins.
“Buy now”, “Buy later”, “The best trade is no trade”.
Different strategies, different risks, different hopes. Someone who buys today a “cheap” vessel could potentially make money from a recovery in asset prices down the line. But is just “cheap” the goal? Let’s assume that the long awaited recovery in the Dry Bulk market delays much further. That instead of a more clearly shaped “up we go” in the period leading to the eventual recovery we get a lot of mini cycles, during which the bottom is around OPEX and the ceiling not too way above. The current crisis in the dry bulk sector – as every crisis does - will undoubtedly generate a new cluster of prosperous shipowners. Whether in this specific crisis these will be the ones betting on a meaningful asset play in the next couple of years (achieved with bigger, more expensive sizes) or the ones investing in vessels that can find employment much easier during market downturns, is probably the question at hand. Investing in a size that can cover more commodities, more ports, has fewer operating expenses and let’s face it is not as easily “controlled” by bigger players, allows owners to not just bet on the asset’s appreciation – a rather risky bet if it takes much longer for the market to recover – but also operate their ships in a less challenging/volatile environment. After all, even though history does repeat itself during market cycles, the fundamentals during the times it does usually differ vastly.
By Eva Tzima
Research Analyst
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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Monday, 11 July 16
DRY BULK MARKET: UP TO 30 MILLION DWT OF OLDER BULKERS WILL NEED TO BE SCRAPPED BY END OF 2017 FOR MARKET TO FIND BALANCE
Tonnage oversupply in the dry bulk market is more than evident, as newbuildings have been hitting the water faster than owners can scrap their olde ...
Friday, 08 July 16
U.S. WEEKLY COAL OUTPUT UP 3% TO 14.1 MMST - EIA
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 14.1 million short tons (mms ...
Thursday, 07 July 16
PANAMAX : THE TENDENCY FROM LAST WEEK CONTINUES WITH A CONSIDERABLY STRONGER SENTIMENT ALL ACROSS THE BLOCK - FEARNLEYS
Capesize
Rates have been holding at steady levels over the last weeks but towards end of this period they are becoming under more pressure as gen ...
Thursday, 07 July 16
CONSOLIDATION TO RULE OVER SHIPPING, AS EXECUTIVES SEEK INVESTMENT OPPORTUNITIES IN CHINA, INDIA AND EUROPE SAYS NORTON ROSE SURVEY
The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead T ...
Wednesday, 06 July 16
KOMIPO INVITES BIDS FOR 780000 MT OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
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- Intertek Mineral Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Iligan Light & Power Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- The University of Queensland
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Toyota Tsusho Corporation, Japan
- Thiess Contractors Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Rashtriya Ispat Nigam Limited - India
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Bhushan Steel Limited - India
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Mjunction Services Limited - India
- VISA Power Limited - India
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Energy Development Corp, Philippines
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Simpson Spence & Young - Indonesia
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Thai Mozambique Logistica
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Merrill Lynch Commodities Europe
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- Deloitte Consulting - India
- The Treasury - Australian Government
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Minerals Council of Australia
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Directorate Of Revenue Intelligence - India
- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Kalimantan Lumbung Energi - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Power Finance Corporation Ltd., India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Madhucon Powers Ltd - India
- Formosa Plastics Group - Taiwan
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Oldendorff Carriers - Singapore
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Meenaskhi Energy Private Limited - India
- OPG Power Generation Pvt Ltd - India
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
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