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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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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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- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Malabar Cements Ltd - India
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- TeaM Sual Corporation - Philippines
- Bhushan Steel Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- International Coal Ventures Pvt Ltd - India
- Uttam Galva Steels Limited - India
- The University of Queensland
- Parliament of New Zealand
- Eastern Energy - Thailand
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- Deloitte Consulting - India
- Planning Commission, India
- Thiess Contractors Indonesia
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Indian Oil Corporation Limited
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Kideco Jaya Agung - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Binh Thuan Hamico - Vietnam
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- Indo Tambangraya Megah - Indonesia
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Chamber of Mines of South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- San Jose City I Power Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Romanian Commodities Exchange
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Meenaskhi Energy Private Limited - India
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Karbindo Abesyapradhi - Indoneisa
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- India Bulls Power Limited - India
- Coalindo Energy - Indonesia
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Electricity Generating Authority of Thailand
- Mercator Lines Limited - India
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Central Electricity Authority - India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Kepco SPC Power Corporation, Philippines
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- PNOC Exploration Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Gujarat Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Energy Link Ltd, New Zealand
- GVK Power & Infra Limited - India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Sakthi Sugars Limited - India
- Cement Manufacturers Association - India
- Vedanta Resources Plc - India
- GAC Shipping (India) Pvt Ltd
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- IEA Clean Coal Centre - UK
- Medco Energi Mining Internasional
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Sinarmas Energy and Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Bangladesh Power Developement Board
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Interocean Group of Companies - India
- Trasteel International SA, Italy
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