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Wednesday, 07 August 13
HANDIES : FINDING IT DIFFICULT TO SUSTAIN THEIR PREVIOUS LEVELS - KONSTANTINOS KONTOMICHIS
 Broker's insight
by Konstantinos Kontomichis,
SnP Broker
Entering the most predictable month of the year, as expected the seasonal effects has pushed sentiment back into negative territory. As the Greek owners are enjoying their summer time off, the S&P market is falling apart. While few prospective buyers have stayed back in their office to grab any chances and possibly avoid competition while doing so, most seem to have postponed their interest till September in the hope of seeing a market that they feel will make more sense. One can say that the recent price inflation posted over the last two quarters in the Dry Bulk market and more specifically for panamax vessels, is an additional reason for some to switch over to a “wait & see” attitude at least until the slowest month (in terms of chartering) has past.
From the beginning of 2013, handy tonnages have faced the smallest fluctuations in values, reflecting the fact that they still the vessels holding the lowest risk exposure in the dry market. Supramax asset values were running on the high end, something which is quite reasonable though considering the fact that this size segment has been enjoying the best returns in the market over the last couple of years. On the other hand the poor rates, overwhelming delivery schedule and overall negative sentiment for Panamaxes during the second half of the previous year caused depressed sales in the sector. The cheapest deals took place, during the end of 2012 and the very beginning of 2013, providing the groundwork and sparking heavy competition amongst Greek cash buyers which resulted in the unexpected climb in prices.
The recent rally in asset prices which we witnessed was also driven by the appearance of funds and private-equity covering the gap left from the more cautious and now heavily regulated banks. Many were claiming “we are scratching the bottom” and their words translated to private investors as “rock bottom bargain prices”. Of course along the way several additional economic factors played their part in the underling reasoning. The bankruptcy of the Cypriot banking system, the instability of Greek financial institutions and the clouded economic policy of the European Union was enough to push investors to the “sea” as a much “safer” choice.
In all these “safer” decisions there seems to be little room for “profitable”. The above decisions are locked at the going charter rates. It does not make any sense at these levels as the actual earnings do not reflect the levels that ship prices have reached. It is no surprise that we have not only reached back to pre-boom long-term repayment periods for bank loans and even surpassing them. Owners are struggling, shipping is still looking like part of a falling domino structure while many fundamentals are still missing from the market such as financing, economic stability, strong world economic growth, slower supply growth etc. Waiting for a market comeback we have to remember there is always a 'Dummy variable”. No one can predict the future, and despite everything seeming “bearish”, there is no telling of the potential direction the market could end up taking.
Chartering (Wet: Stable- / Dry: Stable- )
With the exception of the Capes, the whole of the Dry Bulk market witnessed a further correction in rates on the face of slower activity in the Atlantic and poor positioning overall. The summer blues have continue to overwhelm market players and things are looking set for further decreases over the next couple of days. The BDI closed today (06/08/2013) at 1046points, down by 12 points compared to Monday’s levels (05/08/2013) and a decrease of 21 points compared to previous Tuesday’s levels (29/07/2013).
The crude oil market noted some correction, however overall demand has held fairly well especially when one considers that this is traditionally the slowest part of the year. Demand for Crude oil from the U.S. has now drop, leaving the market ripe for a drop though you never know in this sort of market. The BDTI Monday (05/08/2013), was at 618 points, a decrease of 32 points and the BCTI at 612, an increase of 5 points compared to the previous Monday’s levels (28/07/2013).
Chartering
There was a hold in the rates drop for Capes, with the Atlantic basin showing some improved demand and fending off any further weakening for now. The Pacific was the real market support this week, helping cover much of the slack in demand left by a softer Atlantic and allowing for some temporary relief. With activity likely to drop further over the next couple of weeks especial for iron ore cargoes, August is likely to be a fairly poor performance overall and this current levels are unlikely to hold for long.
Continuing on from the week prior, Panamaxes lost further support this past week as the Atlantic drop further on the face of fewer inquiries coming in from ECSA. The Pacific on the other hand is in no state to cover the gap in demand and is likely going to feel further weakening itself. This overall slower activity has taken its toll on sentiment and it is likely that we will see the index close of this coming Friday well below the 1,000 point mark.
This slower activity in the Atlantic took its toll on Supras as well this week, as it now becomes more evident to what degree the demand from ECSA was holding the market buoyant these past weeks. There was some gains to be noted on other Atlantic basin routes such as Continent/US Gulf, however these were to insignificant to effect the overall picture. Handies were also finding it difficult to sustain their previous levels and have also seen a slight overall drop these past few days. The Pacific basin wasn’t looking very charming either with decreased demand for raw resources from China these past weeks and India still remaining fairly subdued, it looks as though it will be another gloomy August as usual.
Compiled by:
Intermodal Research & Valuations | research@intermodal.gr
Analysts:
Mr. George Lazaridis | g.lazaridis@intermodal.gr
Ms. Eva Tzima | e.tzima@intermodal.gr
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Tuesday, 27 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMPED 15.59 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 15.59 per cent week on week to 2.76 million mt for ...
Monday, 26 August 13
CARRIAGE OF COAL CARGOES FROM KALIMANTAN, INDONESIA - WEST OF ENGLAND P&I CLUB
The Club has recently been advised by consulting scientists and engineers Dr J H Burgoyne and Partners (International) Limited that the number of in ...
Sunday, 25 August 13
API 8 CFR SOUTH CHINA COAL: HEADING TO NORTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 2.39 up month on month. The swap was moved positive ...
Sunday, 25 August 13
THE FREIGHT MARKET S7 & S8 SECTOR IS EXPECTED TO BE STEADY/FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market continued to be firm with all indices moved positive except for Panamax which was slightly down (2 pct down).
T ...
Friday, 23 August 13
US PRODUCED MORE COAL WEEK ON WEEK - EIA
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
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- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cement Manufacturers Association - India
- Semirara Mining Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- IHS Mccloskey Coal Group - USA
- Ceylon Electricity Board - Sri Lanka
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Kideco Jaya Agung - Indonesia
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Carbofer General Trading SA - India
- Renaissance Capital - South Africa
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Power Finance Corporation Ltd., India
- Gujarat Sidhee Cement - India
- Bhushan Steel Limited - India
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Indonesian Coal Mining Association
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Global Green Power PLC Corporation, Philippines
- Coal and Oil Company - UAE
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Bukit Baiduri Energy - Indonesia
- Bangladesh Power Developement Board
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Kumho Petrochemical, South Korea
- Kapuas Tunggal Persada - Indonesia
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- London Commodity Brokers - England
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bhoruka Overseas - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Maharashtra Electricity Regulatory Commission - India
- Uttam Galva Steels Limited - India
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- Manunggal Multi Energi - Indonesia
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- CIMB Investment Bank - Malaysia
- Latin American Coal - Colombia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Borneo Indobara - Indonesia
- Standard Chartered Bank - UAE
- Planning Commission, India
- TeaM Sual Corporation - Philippines
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- PowerSource Philippines DevCo
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Baramulti Group, Indonesia
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
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