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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, 09 July 13
CAPESIZE: SHOT UP; PANAMAXES: NOT SO LUCK; SUPRAS: SLIGHTLY BETTER; HANDIES: SOFT - INTERMODAL
COALspot.com : June 2013 Recap
A renewed Capesize market this month (June 2013) was the cause for much of the overall noteworthy performanc ...
Tuesday, 09 July 13
THE 11TH DEEP COAL PROCESSING FORUM 2013
Press Release : The 11th Deep Coal Processing Forum 2013 will be held in November Beijing China.
CDMC Events is pleased to announce that 11 ...
Monday, 08 July 13
ECO-FRIENDLY COAL FOR CHINA - VALUE FOR THE ENVIRONMENT AND VALUE FOR THE POWER GENERATOR - BY: LINDSAY JUNIPER
COALspot.com : January 2013 saw an episode of extreme particulate pollution in Beijing 35 times worse than the safe level recommended by the World H ...
Sunday, 07 July 13
FREIGHT MARKET IS EXPECTED TO BE SOFT TO STABLE NEXT WEEK- VISTAAR
COALspot.com - The freight market softened for the week ended 5 July 2013, and experienced a decline in all sectors, including BDI. Bulk dry Index d ...
Sunday, 07 July 13
COAL PRICES REMAIN UNDER PRESSURE
COALspot.com – Coal swaps for the year 2014 indicate that, the pressure on coal prices will continue at least until next year. Ave ...
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- Independent Power Producers Association of India
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Heidelberg Cement - Germany
- Africa Commodities Group - South Africa
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Power Finance Corporation Ltd., India
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
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- Banpu Public Company Limited - Thailand
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- New Zealand Coal & Carbon
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- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
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- Indian Oil Corporation Limited
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- Global Green Power PLC Corporation, Philippines
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- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Singapore Mercantile Exchange
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Straits Asia Resources Limited - Singapore
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Commonwealth Bank - Australia
- Global Business Power Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Xindia Steels Limited - India
- Aditya Birla Group - India
- South Luzon Thermal Energy Corporation
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Interocean Group of Companies - India
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Indika Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Coal Association
- Holcim Trading Pte Ltd - Singapore
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- GMR Energy Limited - India
- Coastal Gujarat Power Limited - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Samtan Co., Ltd - South Korea
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- London Commodity Brokers - England
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Siam City Cement - Thailand
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Kohat Cement Company Ltd. - Pakistan
- Bukit Makmur.PT - Indonesia
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Larsen & Toubro Limited - India
- Gujarat Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bhatia International Limited - India
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- Bayan Resources Tbk. - Indonesia
- Simpson Spence & Young - Indonesia
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Metalloyd Limited - United Kingdom
- Coalindo Energy - Indonesia
- The Treasury - Australian Government
- SMC Global Power, Philippines
- The University of Queensland
- International Coal Ventures Pvt Ltd - India
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
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