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Friday, 15 March 13
CHEAP SHIP VALUATIONS DON'T NECESSARILY MEAN ATTRACTIVE SAYS VESSELS VALUE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 With ship prices plunging by double-digits in the past few years, many ship owners are pondering their next moves in a market often described as attractive. But is this really the case, when taking into account other factors, like for instance freight rates? VesselsValue's Adrian Economakis, Strategy Director with the company describes the current and future trends of the ship valuation market. VesselsValue' service has been established as a leading tool among banks, ship onwers and investors in the maritime industry, seeking accurate valuations of various types of vessels.
During the past couple of years, we've seen ship values plunging across the board, as a result of the economical and shipping crisis. Based on your data, could you provide us with some info on the ship types which have been affected the most?
Since 1st Jan 2007, worst performing sectors in terms of asset price depreciation have been the large bulkers. For example, 5 year old Capes are currently at about 30% of their January 2007 value and less than 20% of their mid 2008 peak value. For example, a 5 year old 180k dwt Japanese/Korean built Cape is currently worth around usd 31.2m, while in August 2008 a 5 year old Cape was worth usd 164m and in Jan 2007 was worth usd 89m.
In contrast, of the sectors we currently cover, the best performing has been LNG closely followed by LPG. For example, a resale large LNG vessel (160k cbm) is currently worth about USD 205m while in August 2008 was worth about USD 195m and in Jan 2007 was worth USD 207m (i.e. there a very small decline (c3%) since 2007 and a small increase since summer 2008). This is drastically different to the huge drop in values experienced across the tank, bulk and container sectors.
Do you believe that current market valuations are really that attractive, when adding to the equation, the factor of low freight rates and oversupply of tonnage?
Prices across most of the traditional tank, bulk, container sectors are certainly cheap but this does not necessarily mean attractive. It really depends on your appetite for risk, your view on the future growth of international trade vs growth of the fleet and your investment timeframe.
The issue with buying “cheap” vessels is that they are cheap for a reason, notably due to the low earnings they currently achieve, poor expectations for the future and the current high cost of finance.
Unsurprisingly, the cheapest vessels are in sectors with the worst current earnings and the largest relative orderbooks. For example; Capes, Panamax bulkers, VLCC’s and some of the other larger types have recently had extended periods with earnings at or below their operating cost, resulting in an operating loss even before capital costs and overheads are taken into account. This effectively means that you can buy such a vessel at a cheap price but you will have to support the investment until the earnings improve significantly. Therefore, there is a significant risk in buying cheap vessels at this time in the market, but also the potential for significant gains in the medium to long run if earnings improve.
The sectors with the highest potential for improved earnings are those that have the highest potential for demand growth and lowest potential for fleet growth. In terms of demand, analysis needs to be done on a sector by sector basis, but it essentially depends on growth in the world economy and for the wet and gas sectors, the changing trends of energy demand and production. For example, forecasts of the growth in crude ton miles are currently rather conservative due to the growth in the demand and supply of Gas as an energy source. Also, the gradual movement of refineries to the east is believed to reduce the ton miles of crude and increase ton miles of products. In terms of vessel supply, it really depends on the relative size of the current orderbook and the capacity for new orders in the future. Generally, the more specialized the vessel type, the lower the capacity for future supply. However, these perceptions of demand and supply fundamentals are in many ways already priced into the market which is why we have seen the gas, offshore and to a lesser extent the chemical and product tanker sectors perform significantly better than the traditional crude, bulk and container sectors.
Saying all of this, the only thing that can be said for sure about the shipping market is that the future is unknown. There are many factors that could cause a sudden increase in global demand that could quickly make current prices seem incredibly attractive (and vica versa)
How do you expect the market to behave in the coming months? Do you think that ship prices will continue to fall in the near future?
It really depends on the sector. We continue to see downward pressure in the container sectors with the continuing troubles of the German KG’s. In contrast, we have seen a recent flattening of values and decline in volatility in the Bulk and Tank sectors following the steep drop over the last few years. The bright spark of the market has been the gas ships (LNG & LPG) which have maintained strong values and good earnings. In the near future, we expect this trend to continue, although we hope to see an improvement in product tanker values as their earnings have been pretty strong over the last 6 months or so.
Additionally, it depends on the age and design of the vessels. There is definitely a preference for new, eco designed vessels. We believe these will hold up their values better than the older less efficient vessels that are generally attracting bargain prices
Which was the driving force behind the spawning of Vessels Value?
Our CEO, Richard Rivlin was the real driving force behind the development of VesselsValue. After many years of working at the top of the S&P market, he identified the need for instant and accurate vessel valuation and supporting market intelligence. This need has grown significantly with the recent difficulties of the market. Banks, funds and increasingly owners have realized the huge benefits of having an objective and daily updated view of asset values and market intelligence.
What types of services do you provide?
-- Instant valuations for actual vessels, fleet and portfolios – updated and recalculated daily
-- Daily historical values, time series and excel exports
-- Transactions and vessel specifications
-- Fleet statistics
-- Advanced vessel search functionality
-- Portfolios and automated alerts
What types of ships are included in the valuations that you offer?
Types of ships currently valued:
-- Tankers over 29,500 dwt
-- Bulkers over 20,000 dwt,
-- Containers over 500 teu,
-- LNG & LPG vessels over 100 cbm in size
Shortly, the service will also cover the smaller vessel sizes and offshore.
Which are your main clients?
The main 3 client types are banks, investment funds and shipowners. We also provide our services to commodity & oil majors, brokers, class societies, insurers and lawyers. We currently have around 80 clients on annual subscriptions to our service.
As would be expected, our client base is spread around the world with the largest concentrations in London, New York, Tokyo, Seoul, Athens, Hamburg, Hong Kong and Singapore.
How do you ensure that the ship prices you offer are accurately reflecting current market conditions?
We constantly test the accuracy of our valuations by comparing our values the day before each clean sale and the sale price. We also are constantly analyzing values across the different sectors to make sure are in line with current ongoing negotiations.
Our accuracy level is published monthly on our website.
Are you planning on the introduction of new ship types, to be added in the valuations you provide?
Yes, as per above, we are extending to sub handy/feedermax vessels and offshore types of vessels.
Source: Nikos Roussanoglou, Hellenic Shipping News Worldwide
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Tuesday, 07 May 13
NEWCASTLE PORT'S COAL EXPORTS HOLD STEADY WEEK ON WEEK
COALspot.com - Newcastle port in Australia has loaded 2,975,160 tons of thermal and coking coal for week ended 0700 hours 6 May 2013, Newcastl ...
Monday, 06 May 13
INDONESIAN COAL PRICE REFERENCE FALLS CONTINUE
COALspot.com - The Indonesian government’s declared coal bench mark price has lost $ 3.23 / MT in May 2013.
The monthly coal pr ...
Sunday, 05 May 13
SUB-BIT FOB INDONESIA COAL - MIXED TREND; API 8 CFR SOUTH CHINA COAL - POSITIVE TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average June 2013 delivery has gained 0.28 percent and API 8 CFR South China Coal shipment&nb ...
Saturday, 04 May 13
INDONESIA TO INDIA PANAMAX FREIGHT : FLAT TO SOFT - CAPT. REDDY
COALspot.com - The demand for iron ore picked up and its pushed up the cape size index by 7.86 pct. Cape index closed at 1,344 points. The BDI ...
Friday, 03 May 13
US PRODUCED 17.9 MILLION SHORT TONS (MMST) OF COAL IN A WEEK
COALspot.com - U.S. produced totaled approximately 17.9 million short tons (mmst) in a week (For the week ended April 27, 2013), EIA said in its lat ...
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- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Mjunction Services Limited - India
- LBH Netherlands Bv - Netherlands
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Vizag Seaport Private Limited - India
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Uttam Galva Steels Limited - India
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Parry Sugars Refinery, India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Metalloyd Limited - United Kingdom
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Maharashtra Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Wilmar Investment Holdings
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PNOC Exploration Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- VISA Power Limited - India
- ICICI Bank Limited - India
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- Aditya Birla Group - India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Larsen & Toubro Limited - India
- Minerals Council of Australia
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- The University of Queensland
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Ambuja Cements Ltd - India
- Planning Commission, India
- White Energy Company Limited
- Australian Coal Association
- CIMB Investment Bank - Malaysia
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- Indika Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- San Jose City I Power Corp, Philippines
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Siam City Cement PLC, Thailand
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
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