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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, 13 August 13
AUSTRALIA NEWCASTLE COAL EXPORTS JUMP 30.61 PERCENT ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 30.61 per cent week on week to 2.95 million mt for ...
Monday, 12 August 13
GBCE SUCCESSFUL IN UPGRADING LOW RANK INDONESIAN COAL ON INDUSTRIAL SCALE
COALspot.com : GB Clean Energy Ltd. (GBCE) has annoused that, the company has successfully upgraded 2,426 tonnes of low rank 4,018 kcal NAR Ind ...
Monday, 12 August 13
INDIA - SAFE SHIPMENT OF IRON ORE FINES FROM INDIAN PORTS - WEST OF ENGLAND P&I CLUB
As Members may be aware, in 2009 two ships, the ‘Asian Forest’ and the ‘Black Rose’, capsized and sank following the liquefa ...
Sunday, 11 August 13
INDONESIAN COAL SWAPS : FLAT ON DAY
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average Q4 2013 delivery flat on day due to holidays in Indonesia, Malaysia & ...
Sunday, 11 August 13
SUPRAMAX FREIGHT RATES FROM INDONESIA TO INDIA CONTINUED TO BE SOFT - VISTAAR
COALspot.com : The freight market was soft this week with all indices down , the reason could be long weekend holidays in Indonesia, Singapore and M ...
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- GN Power Mariveles Coal Plant, Philippines
- IEA Clean Coal Centre - UK
- Ambuja Cements Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- PTC India Limited - India
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Mercator Lines Limited - India
- Planning Commission, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Uttam Galva Steels Limited - India
- India Bulls Power Limited - India
- CNBM International Corporation - China
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- Edison Trading Spa - Italy
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Heidelberg Cement - Germany
- Ind-Barath Power Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Salva Resources Pvt Ltd - India
- The University of Queensland
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- LBH Netherlands Bv - Netherlands
- Madhucon Powers Ltd - India
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Jorong Barutama Greston.PT - Indonesia
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- South Luzon Thermal Energy Corporation
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Australian Coal Association
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Sakthi Sugars Limited - India
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Renaissance Capital - South Africa
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Barasentosa Lestari - Indonesia
- SMC Global Power, Philippines
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Ceylon Electricity Board - Sri Lanka
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Economic Council, Georgia
- New Zealand Coal & Carbon
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- Vedanta Resources Plc - India
- Thiess Contractors Indonesia
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