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Sunday, 23 June 13
SHIP PRICES NOT FOLLOWING FREIGHT MARKET FUNDAMENTALS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
 Although it's been the case in many occasions in the past, it appears that ship prices haven't been quite following freight market fundamentals, in terms of future prospects. According to the latest report from shipbroker Intermodal, over the past couple of months we have seen a drastic decoupling of the SnP markets from the reality of the freight markets. "This slowly developing two-tier structure is nothing new, however the widening gap between the two has recently been of much concern to most market players. But why is this gap developing and more crucially, is it sustainable?", wondered Intermodal's Research Analyst, Mr. George Lazaridis.
Attempting to explain this odd situation, he notes that "in the past any widening gap was more difficult to sustain as the fewer amount of asset players in the market left for a market environment with considerably less speculation. During the 2000’s boom this all changed rapidly as the financial markets started to heavily influence the way shipping people made investment decisions. The world of derivatives and complex financial instruments entered our world and had a profound effect, shifting our perspective of the ship itself. It no longer has the image of an industrial machine for transportation, but rather an exchangeable commodity that through time will fluctuate wildly in value. Fast forwarding to where we are today it seems that a part of that legacy has caused the creation of a more forward looking investor who is able to see the benefits of acting in a “bad market” in the hope that he has read the market correctly and that through the life of his investment the average return will be sufficiently lucrative", he said in the weekly report.
Lazaridis went on by noting that "looking at some of the latest deals that we have seen, is there any evidence that these have been done through valid analysis of the current market fundamentals or is it just wildly speculative? The answer to this is that we don’t know. With the market fluctuating in such a volatile way and so unpredictable at times, it seems to be that each investor has different beliefs as to where the market will be over the next couple of months. Its majority rule here and as the lack in serious sellers has kept buyers on their toes, prices have inevitably gone up as each interested buyer outbids the other in order to secure one of the few new sales candidates circulating the market", he said.
According to the analyst, "the nature of all these buyers has been the main driver of the recent price trends. Most upscale European buyers that would typically look at very modern units had been fairly inactive during most of 2012. Their sudden interest created a flurry of activity and over the past 5 months pushed prices up by between 15-20% for vessels of less than 10 years old across most size segments. Panamaxes and Supramaxes have been the ones drawing the most attention and as such have shown the biggest rise in prices", Lazaridis said.
Concluding his argument, he pointed out that "going back to the point of decoupling markets, freight rates have followed a wildly different course. Spot Rates are currently trending at considerably lower than the average seen during 2012 (in the case of Panamaxes that’s around 3% lower) and we haven’t even gone through the summer lull period yet.
FFA’s are also supporting this point further, with expectation for forward rates being soft for a considerable period into the future, although there has been a small upward correction over the past weeks. Even in the case where one would believe of an improving market within 2014 and 2015, there seems to be no reasonable basis for paying an extra premium this early in the cycle and in effect also having to suffer through several months of poor rates, while even the possibility for a recovery being so fragile and there is a constant overshadowing threat that further new ordering could take place and once again engulf the market with excess tonnage. Bets are being placed but I’m not sure that these current premiums will be sustained throughout 2013. As things hold in certain markets such as that of modern panamaxes, it seems to be a better option to sit on the sidelines and act coy in hope that the flock of current buyers will take their pickings and leave the markets once again to drop back down to levels that make more business sense", he concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Saturday, 10 August 13
MOODY'S: OUTLOOK FOR US COAL INDUSTRY CHANGES TO STABLE FROM NEGATIVE
Moody's Investors Service has changed its outlook for the US coal industry to stable from negative, the rating agency says in a new report, "U ...
Saturday, 10 August 13
DEMOLITION ACTIVITY TO BE CRUCIAL AGAIN IN PROVIDING SUPPORT TO THE DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
We appear to have forgotten demolition activity this year, with the Baltic Dry Index gaining traction in the latter part of the second half and emer ...
Friday, 09 August 13
US PRODUCED 4.00 PERCENT LESS COAL ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.00 million short tons (mmst) of ...
Thursday, 08 August 13
HANDY : NO POSITIVE SENTIMENT FOR THE FAR EAST MARKET - FEARNRESEARCH
Handy
No positive sentiment for the Far East market. There are a number of ships coming open in SE Asia this week and owners rating mid/high USD 8k ...
Thursday, 08 August 13
MALAYSIA HOSTS THIRD ANNUAL ASIAN SUB-BITUMINOUS COAL USERS' GROUP CONFERENCE
Press Release : The third Annual Asian Sub-Bituminous Coal Users’ Group (ASBCUG) conference convenes Sept. 30-Oct. 3 at the Eastern & Orie ...
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- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Formosa Plastics Group - Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- GAC Shipping (India) Pvt Ltd
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Timah Investasi Mineral - Indoneisa
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Iligan Light & Power Inc, Philippines
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Tamil Nadu electricity Board
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- Planning Commission, India
- Jorong Barutama Greston.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Directorate General of MIneral and Coal - Indonesia
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- ICICI Bank Limited - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- Indogreen Group - Indonesia
- CNBM International Corporation - China
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Minerals Council of Australia
- SMC Global Power, Philippines
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Carbofer General Trading SA - India
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Makarim & Taira - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Independent Power Producers Association of India
- Latin American Coal - Colombia
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Sindya Power Generating Company Private Ltd
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- GMR Energy Limited - India
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- The Treasury - Australian Government
- Ministry of Mines - Canada
- Karbindo Abesyapradhi - Indoneisa
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- OPG Power Generation Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Kartika Selabumi Mining - Indonesia
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Eastern Energy - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Orica Australia Pty. Ltd.
- Chamber of Mines of South Africa
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
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