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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, 30 July 13
AUSTRALIA'S NEWCASTLE SHIPPED 12.58 PERCENT LESS COAL W-O-W
COALspot.com: Newcastle port in Australia has loaded 2,945,848 tons of coal for the week ended 0700 hours 29 July 2013, Newcastle Port Corp. s ...
Monday, 29 July 13
INDONESIA'S ENERGY NEEDS COULD SPELL GOOD NEWS FOR TANKER OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite abundant energy resources, Indonesia has still failed meet its own demand, which led to a rising import of crude. According to the latest we ...
Sunday, 28 July 13
SUB-BIT INDONESIA COAL SWAP UP SLIGHTLY FOR SEPTEMBER CARGOES
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average September 2013 delivery slightly up on day and week but fell on month on ...
Saturday, 27 July 13
CEPL INDIA TO BAG 0.3 MILLION TONS OF COAL SUPPLY ORDER FROM TNPL
COALspot.com - An India based coal trader Coastal Energy Private Limited has offered the lowest price of US$ 73.00 per metric ton for calorific valu ...
Saturday, 27 July 13
INDONESIA TO INDIA SUPRAMAX FREIGHT RATES ARE EXPECTED TO REMAIN STEADY - CAPT.REDDY
COALspot.com : The freight market seemed to soften this week with BDI , Cape and Panamax indices dropped average 5 percent on week.
The BDI was d ...
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- Rio Tinto Coal - Australia
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- Kumho Petrochemical, South Korea
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Bhatia International Limited - India
- Bayan Resources Tbk. - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- White Energy Company Limited
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Banpu Public Company Limited - Thailand
- Coastal Gujarat Power Limited - India
- The Treasury - Australian Government
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Eastern Coal Council - USA
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Heidelberg Cement - Germany
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Bhushan Steel Limited - India
- Chamber of Mines of South Africa
- Altura Mining Limited, Indonesia
- Meenaskhi Energy Private Limited - India
- Dalmia Cement Bharat India
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Manunggal Multi Energi - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Central Electricity Authority - India
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Posco Energy - South Korea
- Electricity Generating Authority of Thailand
- Ceylon Electricity Board - Sri Lanka
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Global Coal Blending Company Limited - Australia
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Wood Mackenzie - Singapore
- Mercator Lines Limited - India
- Jaiprakash Power Ventures ltd
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Bhoruka Overseas - Indonesia
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Carbofer General Trading SA - India
- Electricity Authority, New Zealand
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Australian Coal Association
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- Baramulti Group, Indonesia
- Mercuria Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Grasim Industreis Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Africa Commodities Group - South Africa
- Attock Cement Pakistan Limited
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Cement Manufacturers Association - India
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Coal and Oil Company - UAE
- Aditya Birla Group - India
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