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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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Tuesday, 14 January 20
SHIPPING MARKET ANALYSIS - ALLIED SHIPBROKING
Uncertainty in the global geopolitical sphere seems to have not come to an end along with 2019, as 2020 commenced with renewed tensions between the ...
Tuesday, 14 January 20
DRY BULK MARKET: "THIS IS NOT THE END OF COAL" SAYS IEA - BALTIC EXCHANGE
A historic drop in coal-fired electricity generation will not sway global coal demand from its upward trajectory through to 2024, though growth wil ...
Saturday, 11 January 20
ARE YOU 95% CONFIDENT THAT YOUR VERY LOW SULPHUR FUEL IS ON SPEC AND MARPOL COMPLIANT? - GARD
KNOWLEDGE TO ELEVATE
Bunker fuel is a commodity and, like all commodities, is produced and sold according to specifications. Bunkers are usual ...
Saturday, 11 January 20
NEW PRICING COULD SPELL TROUBLE FOR CHINA'S COAL SECTOR - CHINA DIALOGUE
Benchmark coal tariffs have been the foundation of China’s electricity pricing since 2004 but this mechanism was replaced on January 1 with a ...
Saturday, 11 January 20
BALTIC BRIEFING TANKER REPORT - WEEK 2
VLCC
Escalating tensions between the USA and Iran, in addition to a continuing strong market, made for an interesting week, with rates firming ...
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- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Deloitte Consulting - India
- Siam City Cement - Thailand
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Central Electricity Authority - India
- Essar Steel Hazira Ltd - India
- Indogreen Group - Indonesia
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- The State Trading Corporation of India Ltd
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- Kaltim Prima Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- SMG Consultants - Indonesia
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- VISA Power Limited - India
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Antam Resourcindo - Indonesia
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Intertek Mineral Services - Indonesia
- Makarim & Taira - Indonesia
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Commonwealth Bank - Australia
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Thai Mozambique Logistica
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- Formosa Plastics Group - Taiwan
- Jaiprakash Power Ventures ltd
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Vizag Seaport Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Merrill Lynch Commodities Europe
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Aditya Birla Group - India
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
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