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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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Thursday, 25 July 13
CAPESIZE : PACIFIC AND ATLANTIC RATES ARE HOLDING STEADY - FEARNLEYS AS
Handy
The Far East market remains quiet even if some Indo coal trip orders were fed in the market at early this week. Prompt ships passing Singapor ...
Thursday, 25 July 13
SUMMER LULL CHIPPING AWAY RECENT GAINS IN DRY BULK FREIGHT RATES - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
In what seems to be establishing as a permanent trend, at least for the time being, the dry bulk market kept on retreating yesterday, even if this r ...
Tuesday, 23 July 13
NEWCASTLE'S COAL EXPORTS CLIMB 17.82% ON WEEK, PORT'S DATA SHOWS
COALspot.com: Newcastle port in Australia has loaded 3,369,865 tons of coal for the week ended 0700 hours 22 July 2013, Newcastle Port Corp. s ...
Monday, 22 July 13
DRY BULK MARKET DIFFICULT TO MAINTAIN POSITIVE DRIVE CLAIMS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has seen a significant recovery in recent weeks, leading most ship classes to earnings above their operating expenses, thus brin ...
Monday, 22 July 13
INDO COAL SWAP FOR AUGUST 13 DELIVERY GAINED ON WEEK BUT LOST ON DAY AND MONTH
COALspot.com – Sub-Bit Indonesia coal swaps (FOB ) for average August 2013 delivery slightly up on week but fell on day and month on Fri ...
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- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Sree Jayajothi Cements Limited - India
- Pendopo Energi Batubara - Indonesia
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- ICICI Bank Limited - India
- Orica Australia Pty. Ltd.
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Thiess Contractors Indonesia
- Singapore Mercantile Exchange
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Latin American Coal - Colombia
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Africa Commodities Group - South Africa
- Chettinad Cement Corporation Ltd - India
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Kumho Petrochemical, South Korea
- Romanian Commodities Exchange
- Samtan Co., Ltd - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Sidhee Cement - India
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- SMC Global Power, Philippines
- Iligan Light & Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- Bukit Asam (Persero) Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- London Commodity Brokers - England
- PTC India Limited - India
- Mercator Lines Limited - India
- Eastern Coal Council - USA
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Alfred C Toepfer International GmbH - Germany
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- SMG Consultants - Indonesia
- The University of Queensland
- Riau Bara Harum - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- Coal and Oil Company - UAE
- Bangladesh Power Developement Board
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Minerals Council of Australia
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Georgia Ports Authority, United States
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Tata Chemicals Ltd - India
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Port Waratah Coal Services - Australia
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Indogreen Group - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Jindal Steel & Power Ltd - India
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
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