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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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Tuesday, 10 May 16
VOLATILITY? VARIATION NO ENIGMA TO SHIPPING..... - CLARKSONS
Along with cyclicality, the other characteristic of the shipping markets which receives frequent mention is volatility. This is so evident that the ...
Monday, 09 May 16
INDONESIAN CS COAL INDICES UP CONTINUES; POSITIVE DIRECTION
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.10 percent week over week to averaging $38.82 per ton on this past Wednesday, a ...
Monday, 09 May 16
DRY BULK SHIPPING TO WITNESS STEADY PROGRESS MOVING FORWARD ON THE BACK OF GROWING TRADE VOLUMES - BIMCO
In its latest short-term analysis of the shipping markets, BIMCO reiterated its optimism on the prospects of the dry bulk market moving forward. Ac ...
Monday, 09 May 16
BALTIC DRY INDEX ENDS WEEK ON A NEGATIVE NOTE
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week.
The freight market was weak and a ...
Friday, 06 May 16
U.S. WEEKLY COAL PRODUCTION UP 9 PERCENT W/W; DOWN 35.3 PERCENT Y/Y - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 11.3 million short to ...
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- The State Trading Corporation of India Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Bayan Resources Tbk. - Indonesia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Interocean Group of Companies - India
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
- Agrawal Coal Company - India
- Sical Logistics Limited - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- The University of Queensland
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- MS Steel International - UAE
- ICICI Bank Limited - India
- Mintek Dendrill Indonesia
- Kartika Selabumi Mining - Indonesia
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Orica Australia Pty. Ltd.
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- LBH Netherlands Bv - Netherlands
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Cigading International Bulk Terminal - Indonesia
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Port Waratah Coal Services - Australia
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Orica Mining Services - Indonesia
- Kideco Jaya Agung - Indonesia
- Latin American Coal - Colombia
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Planning Commission, India
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Deloitte Consulting - India
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Attock Cement Pakistan Limited
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Singapore Mercantile Exchange
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
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