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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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Thursday, 19 May 16
AUSTRALIAN IRON ORE CARGOES PUSHED UP THE FREIGHT RATES FOR CAPE THIS WEEK - FEARNLEYS
Cape
It has been a big jump in the freight rates for Cape size this week, says Fearnleys in its latest weekly report. All of the Australian iron ...
Thursday, 19 May 16
DISPUTE OVER VAT ON COAL DRAGS ON, CAUSING DOUBLE-BLOW TO MINERS - JP
The dispute over the value-added tax ( VAT ) mechanism between coal miners operating under third-generation contracts and the Finance Ministry&rsqu ...
Wednesday, 18 May 16
DRY BULK OUTLOOK REMAINS GLOOMY SAYS DANISH SHIP FINANCE, AS SHIPPING NEEDS TO RETHINK BUSINESS MODEL - HELLENIC SHIPPING
Our Shipping Market Review – May 2016 is devoted to the fourth industrial revolution. To understand the truly disruptive nature of the fourth ...
Wednesday, 18 May 16
LONG TERM FUNDAMENTALS ARE SLOWLY IMPROVING FOR THE DRY BULK MARKET - INTERMODAL
As we are approaching the end of the first half of the year, there is a number of market participants over at the dry bulk sector that have started ...
Tuesday, 17 May 16
INDONESIAN COAL PRICE REFERENCE DECLINE AGAIN
COALspot.com: The Indonesia Coal Benchmark Price declined in May 2016.
The Director General of Mineral and Coal of Indonesia, the regulator of ...
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- Riau Bara Harum - Indonesia
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Bulk Trading Sa - Switzerland
- London Commodity Brokers - England
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Rashtriya Ispat Nigam Limited - India
- Meenaskhi Energy Private Limited - India
- Parliament of New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- The Treasury - Australian Government
- The University of Queensland
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Planning Commission, India
- Metalloyd Limited - United Kingdom
- Ministry of Mines - Canada
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- GAC Shipping (India) Pvt Ltd
- Parry Sugars Refinery, India
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- Independent Power Producers Association of India
- Economic Council, Georgia
- Makarim & Taira - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- PTC India Limited - India
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- McConnell Dowell - Australia
- Medco Energi Mining Internasional
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Vizag Seaport Private Limited - India
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Mjunction Services Limited - India
- Minerals Council of Australia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Africa Commodities Group - South Africa
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sakthi Sugars Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Malabar Cements Ltd - India
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Therma Luzon, Inc, Philippines
- The State Trading Corporation of India Ltd
- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Star Paper Mills Limited - India
- Ceylon Electricity Board - Sri Lanka
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Chettinad Cement Corporation Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
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