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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, 06 August 13
UNLEASHING SHALE GAS POTENTIAL AS A GLOBAL ENERGY GAME CHANGER
In its 4th year running, the Annual Shale Gas Conference will bring leaders from North American shale gas operators, key Asian regulators, multi ...
Tuesday, 06 August 13
GBCE APPOINTS BENJAMIN WILEY AS NEW MANAGING DIRECTOR
COALspot.com : GB Clean Energy Ltd. (GBCE) announced today that Mr. Benjamin Wiley has been appointed as Managing Director.
Mr. Wiley has ...
Tuesday, 06 August 13
AUSTRALIAN NEWCASTLE PORT'S COAL EXPORTS FALL 23.16 PERCENT ON WEEK TO 2.26 MMT
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 15.8 percent week on week to 2.26 million mt for ...
Monday, 05 August 13
PAPERLESS TRADING (ELECTRONIC BILLS OF LADING) - FREQUENTLY ASKED QUESTIONS ("FAQS") - UK P&I CLUB
A number of Members have contacted the Club with queries regarding the use of electronic bills of lading and any potential consequences for P&I ...
Monday, 05 August 13
INDO GOVERNMENT'S DECLARED HBA IN AUGUST '13 FALL TO LOWEST LEVEL SINCE JANUARY '10
COALspot. com - HBA fell to US$ 76.70 this month, the lowest since January 2010. Indonesian Coal Price Reference fell 6.11% and hitting a 2013 ...
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- Kepco SPC Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Planning Commission, India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Parliament of New Zealand
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Borneo Indobara - Indonesia
- Larsen & Toubro Limited - India
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Bhushan Steel Limited - India
- TeaM Sual Corporation - Philippines
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Coal and Oil Company - UAE
- Holcim Trading Pte Ltd - Singapore
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Africa Commodities Group - South Africa
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Star Paper Mills Limited - India
- SMG Consultants - Indonesia
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Price Waterhouse Coopers - Russia
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Coastal Gujarat Power Limited - India
- Tata Chemicals Ltd - India
- Aditya Birla Group - India
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Timah Investasi Mineral - Indoneisa
- Wilmar Investment Holdings
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Australian Coal Association
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Anglo American - United Kingdom
- ASAPP Information Group - India
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Heidelberg Cement - Germany
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Business Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Makarim & Taira - Indonesia
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Gujarat Sidhee Cement - India
- CNBM International Corporation - China
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Trasteel International SA, Italy
- Electricity Generating Authority of Thailand
- Rashtriya Ispat Nigam Limited - India
- PTC India Limited - India
- Central Electricity Authority - India
- Jorong Barutama Greston.PT - Indonesia
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