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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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Wednesday, 17 July 13
NEWCASTLE COAL EXPORTS FELL 3.85% ON WEEK
COALspot.com: Newcastle port in Australia has loaded 2,860,149 tons of coal for the week ended 0700 hours 15 July 2013, Newcastle Port Corp. s ...
Wednesday, 17 July 13
TORN BETWEEN A CREDIT CRUNCH AND SUSTAINABLE GROWTH - GEORGE DERMATIS
COALspot.com: In 2012 China expanded at a rate of 7.8%, its worst annual performance in 13 years, raising criticism over the newly appointed governm ...
Tuesday, 16 July 13
TAKE - OR - PAY CONTRACTS CONTINUE TO INCENTIVISE AUSTRALIAN COAL PRODUCERS DESPITE POTENTIAL NEGATIVE CASH MARGINS - WOOD MACKENZIE
Australia's coal production has continued to grow, despite lower coal prices in 2013. Global investors and suppliers are therefore questioning whet ...
Monday, 15 July 13
INDONESIAN GOVERNMENT HAS REVISED DOWN ITS JULY BENCH-MARK COAL PRICE TO US$ 81.69 PER MT
COALspot. com - Indonesian Coal Price Reference dropped 3.75 % and hitting a 2013 low. The Indonesian government has revised down its owned coal ben ...
Monday, 15 July 13
INDO COAL SWAPS ARE STRUGGLING FOR RIGHT DIRECTION
COALspot.com – Indo coal swaps are struggling to find the right direction. Sub-Bit Indonesia coal swaps (FOB ) for average August 2013 d ...
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- PowerSource Philippines DevCo
- Siam City Cement PLC, Thailand
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Latin American Coal - Colombia
- Aditya Birla Group - India
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Trasteel International SA, Italy
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Madhucon Powers Ltd - India
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Attock Cement Pakistan Limited
- Krishnapatnam Port Company Ltd. - India
- The Treasury - Australian Government
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Central Electricity Authority - India
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Petron Corporation, Philippines
- Vizag Seaport Private Limited - India
- Kaltim Prima Coal - Indonesia
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Alfred C Toepfer International GmbH - Germany
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- AsiaOL BioFuels Corp., Philippines
- Jorong Barutama Greston.PT - Indonesia
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Toyota Tsusho Corporation, Japan
- Metalloyd Limited - United Kingdom
- Global Green Power PLC Corporation, Philippines
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Parry Sugars Refinery, India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Wood Mackenzie - Singapore
- Altura Mining Limited, Indonesia
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Merrill Lynch Commodities Europe
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Romanian Commodities Exchange
- Banpu Public Company Limited - Thailand
- Bharathi Cement Corporation - India
- Ministry of Finance - Indonesia
- Mjunction Services Limited - India
- Larsen & Toubro Limited - India
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Global Coal Blending Company Limited - Australia
- Sical Logistics Limited - India
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- Antam Resourcindo - Indonesia
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Maharashtra Electricity Regulatory Commission - India
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Parliament of New Zealand
- CNBM International Corporation - China
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Bhatia International Limited - India
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Mercator Lines Limited - India
- Bukit Baiduri Energy - Indonesia
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Anglo American - United Kingdom
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
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