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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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Friday, 05 July 13
THE DRY BULK MARKET IS GOING FROM STRENGTH TO STRENGTH - INTERMODAL
The Capesize sector has been one that has gone through a wild rollercoaster of emotions this past decade, ranging from the exuberance witnessed duri ...
Thursday, 04 July 13
CHALLENGER SIGNS FORMAL EXCLUSIVE MINING AND MARKETING AGREEMENT FOR ABBR PROJECT IN CENTRAL KALIMANTAN
COALspot.com - Challenger Deep Resources Corp., through its subsidiary PT Bestindo Energy has signed the formal exclusive Mining and Marketing agree ...
Thursday, 04 July 13
ASX LISTED QBL TO ACQUIRE INTERESTS IN MOZAMBIQUE COAL EXPLORATION LICENSES
- QBL to acquire interests in two Mozambique exploration licences prospective for coal
- Licenses located in the highly prospective Zambezi basin, ...
Thursday, 04 July 13
HANDY : INDO/CHINA, CHARTERERS RATING AROUND US$ 10,000 - FEARNLEYS AS
Handy
The Feast market firmed slightly up as mid-July cargos entered the market, but charterers seems not in hurry to cover them and looking for ch ...
Wednesday, 03 July 13
NEWCASTLE COAL EXPORTS DIP 24.79 PER CENT WOW
COALspot.com - Newcastle Coal exports fell 24.79% to 2.33 million tons WoW.
Newcastle port in Australia has loaded 2,332,513 tons of coal for the ...
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- Vedanta Resources Plc - India
- Medco Energi Mining Internasional
- Straits Asia Resources Limited - Singapore
- Bayan Resources Tbk. - Indonesia
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- Meenaskhi Energy Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- International Coal Ventures Pvt Ltd - India
- Star Paper Mills Limited - India
- Directorate Of Revenue Intelligence - India
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
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- Parliament of New Zealand
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- Romanian Commodities Exchange
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- Samtan Co., Ltd - South Korea
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- Ministry of Transport, Egypt
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- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- SMG Consultants - Indonesia
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Latin American Coal - Colombia
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Sojitz Corporation - Japan
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Renaissance Capital - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- GVK Power & Infra Limited - India
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Larsen & Toubro Limited - India
- OPG Power Generation Pvt Ltd - India
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Baramulti Group, Indonesia
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Commonwealth Bank - Australia
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Australian Commodity Traders Exchange
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Tata Chemicals Ltd - India
- Kideco Jaya Agung - Indonesia
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Heidelberg Cement - Germany
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- IEA Clean Coal Centre - UK
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- ASAPP Information Group - India
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- The State Trading Corporation of India Ltd
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Aboitiz Power Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Simpson Spence & Young - Indonesia
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Economic Council, Georgia
- Global Coal Blending Company Limited - Australia
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- SMC Global Power, Philippines
- GMR Energy Limited - India
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