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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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Sunday, 19 May 13
COAL PRICES ARE SLUMPING DUE TO WEAK DEMAND
COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for average July 2013 delivery have gained 0.03 percent and API 8 CFR South China Coal shipment g ...
Sunday, 19 May 13
FREIGHT RATES TO REMAIN UNSTABLE AND VOLATILE - CAPT. REDDY
COALspot.com – The freight remained weak this week with all the segments down.
The BDI, the Baltic Dry Index is a number issued daily by th ...
Friday, 17 May 13
US COAL PRODUCTION CLIMBED 3.35 PER CENT WEEK ON WEEK
COALspot.com - U.S. produced totaled approximately 18.50 million short tons (mmst) in a week (For the week ended May 11, 2013), EIA said in its late ...
Thursday, 16 May 13
PANAMAX: THE FORWARD CURVE IS FALLING GRADUALLY - FEARNRESEARCH
Handy
The Atlantic market remained quiet. The USG-Feast was at USD 19k and Black Sea-Feast was at USD 11k. The Pacific market remained uncertain as ...
Tuesday, 14 May 13
KALIMANTAN COAL
Press Release : After a very successful conference in 2012, the second annual event will address latest market developments and address the future p ...
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- SN Aboitiz Power Inc, Philippines
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- Xindia Steels Limited - India
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- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
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- Central Java Power - Indonesia
- Indian Oil Corporation Limited
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- Energy Link Ltd, New Zealand
- The Treasury - Australian Government
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- Metalloyd Limited - United Kingdom
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- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
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- Chamber of Mines of South Africa
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Bulk Trading Sa - Switzerland
- Africa Commodities Group - South Africa
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
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- Anglo American - United Kingdom
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- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
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- Parliament of New Zealand
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- Medco Energi Mining Internasional
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- Eastern Coal Council - USA
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- Bahari Cakrawala Sebuku - Indonesia
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- Sindya Power Generating Company Private Ltd
- Sojitz Corporation - Japan
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- Gujarat Sidhee Cement - India
- Port Waratah Coal Services - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
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- Australian Coal Association
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- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
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- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
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- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Independent Power Producers Association of India
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- GVK Power & Infra Limited - India
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Indika Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Salva Resources Pvt Ltd - India
- Wood Mackenzie - Singapore
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Sical Logistics Limited - India
- Ministry of Finance - Indonesia
- VISA Power Limited - India
- IHS Mccloskey Coal Group - USA
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
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- Globalindo Alam Lestari - Indonesia
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- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
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- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
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