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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.
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Sunday, 18 August 13
SUB-BIT FOB INDONESIA COAL SWAP : ON POSITIVE DIRECTION ON DAY, WEEK AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery US$ 1.83 up month on month. The swap was moved positive ...
Sunday, 18 August 13
INDO - INDIA FREIGHT EXPECTED TO BE FIRM NEXT WEEK - VISTAAR
COALspot.com - The freight market was up this week with the BDI gaining more than 10 pct due to strong Cape Sector.
The BDI was closed at 1,102 p ...
Friday, 16 August 13
US COAL PRODUCTION SLIGHTLY UP ON WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.10 million short tons (mmst) of ...
Thursday, 15 August 13
CAPESIZE : TRENDS SOMETIMES SHIFT WITH NO PRIOR WARNING - FEARNRESEARCH
Handy
The influence of the summer holidays across Europe was felt in the Atlantic basin this week. Very little activity and a growing list of avail ...
Wednesday, 14 August 13
ANOTHER WEEK IN THE RED FOR DRY BULK CARRIERS - INTERMODAL
Chartering (Wet: Stable- / Dry: Stable- )
Another week in the red for Dry Bulk carriers with the market losing further steam as fewer an ...
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- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Baramulti Group, Indonesia
- GAC Shipping (India) Pvt Ltd
- Minerals Council of Australia
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- Planning Commission, India
- Mercator Lines Limited - India
- Sinarmas Energy and Mining - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PowerSource Philippines DevCo
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Chamber of Mines of South Africa
- Gujarat Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- The University of Queensland
- Kartika Selabumi Mining - Indonesia
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- PTC India Limited - India
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Deloitte Consulting - India
- Ambuja Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Singapore Mercantile Exchange
- Gujarat Sidhee Cement - India
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- New Zealand Coal & Carbon
- Siam City Cement - Thailand
- Coastal Gujarat Power Limited - India
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- Australian Coal Association
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Edison Trading Spa - Italy
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Goldman Sachs - Singapore
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- White Energy Company Limited
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Cigading International Bulk Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Meenaskhi Energy Private Limited - India
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Vizag Seaport Private Limited - India
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Intertek Mineral Services - Indonesia
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Bayan Resources Tbk. - Indonesia
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Bukit Baiduri Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Global Business Power Corporation, Philippines
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
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