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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, 18 April 16
SOUTH KOREA STATE-OWNED UTILITY KOMIPO INVITES COAL BIDS FOR BORYEONG POWER PLANT
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 70,000 Metric Tons of 4,600 kcal/kg NAR coal for ...
Monday, 18 April 16
SOUTH AFRICA RB1 COAL HAS LOST GROUND IN INDIA; RB2 MAY LOSE GRIP IF THE PRICE CROSSES US$ 50 A TON - TRADERS
COALspot.com: Indian coal consumers preferred to buy South Africa RB2 coal instead of RB1 coal recent months due to RB2's low CFR price level. ...
Monday, 18 April 16
CAPESIZE INDEX ROSE 44.66 PER CENT WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rose this week.
The freight market was ...
Friday, 15 April 16
PANAMAX MARKET CONTINUES TO FIRM - FEARNLEYS
Cape
It has been a positive freight market for the past few weeks, however, this week the market is taking a small breather, says Fearnleys in it ...
Friday, 15 April 16
U.S WEEKLY COAL OUTPUT FALLS ACROSS ALL BASINS - EIA
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.2 million short tons (mm ...
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- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- The State Trading Corporation of India Ltd
- Videocon Industries ltd - India
- Energy Development Corp, Philippines
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Ceylon Electricity Board - Sri Lanka
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Parliament of New Zealand
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Latin American Coal - Colombia
- GAC Shipping (India) Pvt Ltd
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Thiess Contractors Indonesia
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Central Java Power - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Gujarat Mineral Development Corp Ltd - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Bharathi Cement Corporation - India
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- SMG Consultants - Indonesia
- Aboitiz Power Corporation - Philippines
- Mercuria Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Indian Oil Corporation Limited
- Riau Bara Harum - Indonesia
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Jindal Steel & Power Ltd - India
- Star Paper Mills Limited - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- TNB Fuel Sdn Bhd - Malaysia
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- PNOC Exploration Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- Commonwealth Bank - Australia
- Minerals Council of Australia
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Vedanta Resources Plc - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- ICICI Bank Limited - India
- Mjunction Services Limited - India
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Kumho Petrochemical, South Korea
- Mintek Dendrill Indonesia
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Holcim Trading Pte Ltd - Singapore
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Romanian Commodities Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Chamber of Mines of South Africa
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Chettinad Cement Corporation Ltd - India
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