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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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Monday, 15 April 13
SUB - BIT INDONESIA COAL SWAP SHOWS POSITIVE TREND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average Q2’ 2013 delivery has gained 2.70 percent and CFR South China coal shipment&nbs ...
Saturday, 13 April 13
THE FREIGHT MARKETS EXPECTED TO HOLD FIRM NEXT WEEK - CAPT. REDDY
COALspot.com - This freight market firmed up this week and all sectors were up except for Supramax index.
The BDI was up by 1.62 pct closing at 8 ...
Friday, 12 April 13
DRY BULK SHIP OWNERS DEVELOPED NEWFOUND APPETITE FOR BULKERS DURING FIRST QUARTER OF 2013 - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's official; more and more ship owners operating in the dry bulk market appear to have developed a newfound optimism in the market's prospects. ...
Thursday, 11 April 13
HANDY: INDO - INDIA NOW BEEN REPORTED AT APS BASIS AT USD 10K+BB 85K - FEARNLEYS
Handy
The Atlantic markets remain with not many cargoes seen this week. The USG-Feast was at USD 18k and Black Sea-Feast was at USD 12k. The Pacifi ...
Thursday, 11 April 13
AUSTRALIA'S NEWCASTLE PORT SHIPPED 15.96 PERCENT LESS COAL W-O-W
COALspot.com - Newcastle port in Australia has loaded 2,545,914 tons of thermal and coking coal for week ended 0700 hours 8 April 2013, Newcas ...
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- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Pendopo Energi Batubara - Indonesia
- Savvy Resources Ltd - HongKong
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- PTC India Limited - India
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Medco Energi Mining Internasional
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Minerals Council of Australia
- Port Waratah Coal Services - Australia
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- SN Aboitiz Power Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Parry Sugars Refinery, India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Madhucon Powers Ltd - India
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- Wood Mackenzie - Singapore
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Australian Commodity Traders Exchange
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Australian Coal Association
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Uttam Galva Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indian Energy Exchange, India
- Economic Council, Georgia
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Orica Mining Services - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- The State Trading Corporation of India Ltd
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Wilmar Investment Holdings
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- Videocon Industries ltd - India
- Barasentosa Lestari - Indonesia
- White Energy Company Limited
- The University of Queensland
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- LBH Netherlands Bv - Netherlands
- Georgia Ports Authority, United States
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- SMC Global Power, Philippines
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- PowerSource Philippines DevCo
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