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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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Friday, 19 July 13
U.S.COAL PRODUCTION TOTALED APPROXIMATELY 19.60 MMST WEEK ENDED JULY 13
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 19.60 million short tons (mmst) of ...
Friday, 19 July 13
TNPL IS LOOKING FOR 300 K MT OF 6000 GAD COAL FOR FIVE MONTH
COALspot.com - Tamil Nadu Newsprint & Papers Ltd. , an Indian paper maker, is seeking 300,000 metric tons ± 5% (In 5 shipments about 60,0 ...
Thursday, 18 July 13
3RD ANNUAL FLOATING TERMINALS, INDONESIA
Commercial applications for offshore transshipment facilities
Floating Terminal solutions are increasingly being deployed by miners, independent ...
Thursday, 18 July 13
THE CAPE MARKET APPEARS TO BE HOLDING FIRM - FEARNLEYS AS
Handy
In the Pacific, market maintained similar levels during the week. There is several Indo coal orders in the market, ships passing Singapore fi ...
Thursday, 18 July 13
DRY BULK MARKETS RETAINS RECENT GAINS, MOVES SIDEWAYS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept on moving sideways this week, as evidenced by the latest trends of the industry's benchmark, the Baltic Dry Index (BDI ...
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- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- White Energy Company Limited
- Asmin Koalindo Tuhup - Indonesia
- Sojitz Corporation - Japan
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Siam City Cement PLC, Thailand
- ASAPP Information Group - India
- Malabar Cements Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- The State Trading Corporation of India Ltd
- GVK Power & Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Intertek Mineral Services - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- GAC Shipping (India) Pvt Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Grasim Industreis Ltd - India
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Sical Logistics Limited - India
- Goldman Sachs - Singapore
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Kepco SPC Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- GMR Energy Limited - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Uttam Galva Steels Limited - India
- Bangladesh Power Developement Board
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- London Commodity Brokers - England
- Bhatia International Limited - India
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Coal and Oil Company - UAE
- Electricity Generating Authority of Thailand
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Semirara Mining and Power Corporation, Philippines
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- Bhoruka Overseas - Indonesia
- Eastern Energy - Thailand
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- CIMB Investment Bank - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- Posco Energy - South Korea
- OPG Power Generation Pvt Ltd - India
- The University of Queensland
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Romanian Commodities Exchange
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Australian Coal Association
- Bahari Cakrawala Sebuku - Indonesia
- PTC India Limited - India
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
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