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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, 23 April 13
INDONESIAN STATE OWNED COAL MINER SHIPPED 4 PERCENT MORE COAL IN 1Q
COALspot.com - PT. Bukit Asam, the Indonesian state owned coal miner shipped more coal in first quarter of this year compared to the same period in ...
Tuesday, 23 April 13
REALM CONTINUES AS 51% OWNER AND MANAGER OF THE KATINGAN RIA THERMAL COAL PROJECT
COALspot.com - Realm Resources Ltd. (ASX: RRP) has announced today that, the commercial way forward for the development of its 51% held Indonesian t ...
Tuesday, 23 April 13
TIGERS REALM COAL HAS SOME OF THE WORLD'S BEST UNDEVELOPED COKING COAL ASSETS - EXECUTIVE CHAIRMAN
COALspot.com - “ During 2012, your Company has made very significant progress towards meeting its stated objective of becoming a global player ...
Tuesday, 23 April 13
AUSTRALIA'S NEWCASTLE PORT COAL SHIPMENTS DROPPED BY 4.38 PERCENT W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,434,336 tons of thermal and coking coal for week ended 0700 hours 22 April 2013, Newca ...
Sunday, 21 April 13
INDONESIA - INDIA COAL FREIGHT RATES ARE FIRMING UP - CAPT. REDDY
COALspot.com – The BDI was up by 1.40 pct closed at 888 points week ended 19 April 2013. The Cape index was down by 2.45 pct closing at 1234 p ...
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- Kartika Selabumi Mining - Indonesia
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- Thai Mozambique Logistica
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- Chamber of Mines of South Africa
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- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
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- Indian Energy Exchange, India
- Miang Besar Coal Terminal - Indonesia
- Heidelberg Cement - Germany
- Bhatia International Limited - India
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- GVK Power & Infra Limited - India
- Indian Oil Corporation Limited
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
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- Asmin Koalindo Tuhup - Indonesia
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Indogreen Group - Indonesia
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Intertek Mineral Services - Indonesia
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- Vizag Seaport Private Limited - India
- Siam City Cement PLC, Thailand
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Thiess Contractors Indonesia
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- Standard Chartered Bank - UAE
- Salva Resources Pvt Ltd - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Bhushan Steel Limited - India
- Electricity Authority, New Zealand
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Sarangani Energy Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- Gujarat Electricity Regulatory Commission - India
- Indo Tambangraya Megah - Indonesia
- Mercator Lines Limited - India
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Aboitiz Power Corporation - Philippines
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Wilmar Investment Holdings
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- PTC India Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Ministry of Finance - Indonesia
- Minerals Council of Australia
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- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Mercuria Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- ICICI Bank Limited - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Australian Coal Association
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- AsiaOL BioFuels Corp., Philippines
- Cigading International Bulk Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Oldendorff Carriers - Singapore
- Parliament of New Zealand
- Merrill Lynch Commodities Europe
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Marubeni Corporation - India
- New Zealand Coal & Carbon
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- The State Trading Corporation of India Ltd
- Billiton Holdings Pty Ltd - Australia
- Eastern Energy - Thailand
- Planning Commission, India
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Global Business Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Grasim Industreis Ltd - India
- White Energy Company Limited
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