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Tuesday, 18 February 20
WEEKLY MARKET ANALYSIS - ALLIED
 Under such poorly performing market circumstances, many usually take the historical approach, in order to better understand and further analyze the present state of the market. However, to what degree is this a "fair" comparison to undertake right now?
According to Thomas Chasapis, Research Analyst of Allied Shipping Research the freight collapse of 2016 in the dry bulk sector has been a reference case for every discussion when the market has undergone any severe downward pressure. However, despite its excessive impact, it was a "known" situation, or to put it more bluntly, it was 'an accident waiting to happen'.
Thomas Chasapis further noted that, the excess tonnage capacity was the result of the massive new order activity that had taken place in years prior, as well as, the disconnected relationship of demand and supply fundamentals, eventually pushing freight earnings to their perceived absolute bottom. After that, the market started to adapt to this new market reality, with more modest orderbook activity and, for a time, massive scrapping activity. This "rebalancing" phase helped translate over to a 2-year period of ever-improving freight market conditions (with some minor corrections here and there), coupled by a more stable market with lower volatility. Suddenly though, from the later part of 2018 the picture was promptly altered. This high-risk environment is not something new for the shipping industry, nor are the periodical exaggerations and asymmetries in realized earnings.
However, Thomas Chasapis, said in his latest research report, having experienced a series of single shock events in such a short period of time, it comes naturally to question the robustness of the different business models. Tail risks and “black swans", won’t be just catch phrases, but a change in investment attitude while we enter a new "era" of how we quantify different kinds of market risks (and their likelihood of being fulfilled).
According to Allied, the COVID-19 outbreak has disrupted most business activities worldwide, with the possible outcomes being numerous and presenting multiple decision directions to practitioners. In other words, we are in a genuine situation, where an absolute comparison to previously noted similar excessive negative pressures would be, to say the least, misleading. Prior to the beginning of this year, the discussion revolved around the potential of a two-tier market unfolding, depending on what type of fuel each vessel would burn. As it turns out and from all that has transpired, we may be experiencing a multi-tier freight market. The Pacific market is in sharp negative territory in terms of earnings, while in the Atlantic, things are relatively more promising (even if not particularly good). Moreover, especially for scrubbers-fitted units, freight rates are following a completely different orbit than what is presented by the quoted Baltic freight indices. The asymmetrical freight market is one of the many bizarre things happening right now. With a certain time-lag, asset prices are likely to follow this steep downward correction (this has not fully materialized yet). With the market in disarray, where uncertainty is the prevailing sentiment, the mispricing of different asset classes is the obvious outcome. The bargain attitude, as well as, the short-term unpredictable outlook has created an excessive "bid-ask spread", indicating a market in distress, unable to properly price both the future risks and trends involved. 2020 has already shown to be a challenging year. Even with a very weak short-term outlook, the market may well absorb most of the negative side effects and eventually return to an upward track much sooner than many expect.
Despite this however, the longer-term macroeconomic trends are still troubling. China is already facing the possibility of losing around 0.5% points from its projected growth for this year, something that would translate over to a significant step back in global seaborne trade, Thomas Chasapis concluded.
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Wednesday, 05 February 20
CORONAVIRUS AND THE SHIPPING INDUSTRY - WATSON, FARLEY & WILLIAMS
The continued spread of Coronavirus and governmental measures to minimise the impact is likely to affect the shipping industry and supply chain.
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Wednesday, 05 February 20
INDONESIA'S COAL PRICE REFERENCE UP 1.46% IN FEBRUARY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Wednesday, 05 February 20
MARKET INSIGHT - INTERMODAL
The oil and gas industry benefitted from a strong and solid ground in the previous year. We witnessed a slow but steady increase in bunker’s ...
Wednesday, 05 February 20
RUSSIA EXPORTED 28.6 MLN TONNES OF LNG IN 2019 - REFINITIV
A lot of attention has been paid recently on the surge in LNG exports from the United States. However, another country which is seeing truly expone ...
Tuesday, 04 February 20
CAPE: THE AVERAGE EARNINGS PER DAY FELL BENEATH THE USD 4,000, A LEVEL CONSIDERABLY BELOW EVEN THE MOST CONSERVATIVE OPEX LEVELS - ALLIED
The recent slump in the dry bulk freight market may well have been expected to some degree, but despite this the shock was still overwhelming when ...
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- Minerals Council of Australia
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- Parliament of New Zealand
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- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- Eastern Coal Council - USA
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- Wood Mackenzie - Singapore
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- Formosa Plastics Group - Taiwan
- Romanian Commodities Exchange
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- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Mintek Dendrill Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Maharashtra Electricity Regulatory Commission - India
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Aboitiz Power Corporation - Philippines
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Straits Asia Resources Limited - Singapore
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Central Electricity Authority - India
- Asmin Koalindo Tuhup - Indonesia
- India Bulls Power Limited - India
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- The University of Queensland
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Videocon Industries ltd - India
- Bulk Trading Sa - Switzerland
- Ministry of Finance - Indonesia
- Africa Commodities Group - South Africa
- Antam Resourcindo - Indonesia
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- South Luzon Thermal Energy Corporation
- Indogreen Group - Indonesia
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Timah Investasi Mineral - Indoneisa
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- CIMB Investment Bank - Malaysia
- Heidelberg Cement - Germany
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- GVK Power & Infra Limited - India
- Posco Energy - South Korea
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
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