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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, 04 August 13
COAL SWAP MARKET HAS LOST DIRECTION; STRUGGLING TO CATCH UP
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average October 2013 delivery slightly down on day, week and month on Friday, 2 A ...
Sunday, 04 August 13
INDONESIA TO INDIA SUPRAMAX FREIGHT SOFT DUE TO HOLIDAYS IN INDONESIA - VISTAAR
COALspot.com : The freight market was fairly steady this week with the BDI recovering towards north since second half of the week with the support o ...
Friday, 02 August 13
DRY BULK MARKET STABILIZES ON RENEWED MARKET ACTIVITY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept its positive footing this week, although it's still a far cry to deem the market situation as a growing one, especiall ...
Friday, 02 August 13
ASIA ACCOUNTS FOR 27.95 PERCENT OF US COAL EXPORTS IN Q1, 2013
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.80 million short tons (mmst) of ...
Thursday, 01 August 13
CAPESIZE: THE FLOW OF CARGOES REMAINS RELATIVELY STABLE, AND THE PACIFIC IS LOOKING PROMISING - FEARNLEYS AS
Handy
The Pacific market is still facing low activity, so no wonder that the tonnage list is getting longer. It´s still Ramadan and only a fe ...
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- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Sree Jayajothi Cements Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Bhoruka Overseas - Indonesia
- Minerals Council of Australia
- GMR Energy Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- India Bulls Power Limited - India
- Australian Coal Association
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- South Luzon Thermal Energy Corporation
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Riau Bara Harum - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Parliament of New Zealand
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate General of MIneral and Coal - Indonesia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Rio Tinto Coal - Australia
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Electricity Generating Authority of Thailand
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- The University of Queensland
- Cigading International Bulk Terminal - Indonesia
- Sakthi Sugars Limited - India
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Holcim Trading Pte Ltd - Singapore
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Kobexindo Tractors - Indoneisa
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- San Jose City I Power Corp, Philippines
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Gujarat Sidhee Cement - India
- Bukit Makmur.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Indian Oil Corporation Limited
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Simpson Spence & Young - Indonesia
- Karaikal Port Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- MS Steel International - UAE
- Planning Commission, India
- Oldendorff Carriers - Singapore
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- IEA Clean Coal Centre - UK
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