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Wednesday, 25 September 13
IS IT TIME AGAIN TO SUPERSIZE AGAIN? - GEORGE LAZARIDIS
 After an early arrival of the seasonal rally in the Capesize market, things look to be on the upbeat for these dry bulk giants. With the Index reaching just over 4,000 points and the average of the 4 TC routes only a breadth away from US$ 40,000/day, it looks as though the worst is now behind us and all market players take an opportunity for a breather and to reorganize their strategy. This climb in the freight market is no small feat. The last time we saw the freight market climb to these levels was back in 2010 in the respective September rally then. This was at a time when the Capesize and VLOC fleet stood at around 1,096 vessels compared to the current fleet of 1,437 (that’s give or take 500 deliveries minus scrapping and a more than 30% increase in carrying capacity). In comparison we now stand head to head with a considerably smaller orderbook schedule (14% orderbook to fleet ratio compared to the 50% seen in 2010) and are still seeing a strong rise in demand from commodities such as iron ore and coal albeit.
As promising as the above may sound, this may end up being nothing more than just a September rally. Rates will drop back down from their current highs and although it doesn’t look likely that they will reach the lows of 2012 any time soon, it also looks unlikely that we will soon see a rapid boom in the market that would drive a major “bull rush” and that may well be why we haven’t really seen that many investors in a hurry to secure units in the secondhand market nor slots in the newbuilding market.
On the Other hand, looking at both the prices in the secondhand market and newbuilding market, you do tend tο wonder why we haven’t seen more activity? I mean it’s not like Capes had been excessively priced compared to Panamaxes, with the latter having witnessed a remarkable rise in interest and activity over the past nine months. Granted that all prices have now gone up since their previous rock bottom levels of December 2012, however there is still reason to take interest in this size segment. Resale, 5 year old and 10 year old units are trading at price levels which are at competitive levels when compared to their newbuilding counterparts. Yes, they may not be new eco-designs, but the discount is still noteworthy (11%, 30% and 56% cheaper than a newbuilding for resale, 5 year old and 10 year old respectively) and when compared to their current going period charter levels, it makes sense to take on this minimal risk as the pay-off seems to be significant.
The current price gap that has occurred has been partly due to the sharp rise in newbuilding prices over the past nine months which was at a faster pace than the secondhand market could accommodate. What’s more is that although we are not at the absolute bottom anymore, we are still at low secondhand price levels which were last seen in the early 2000’s. As an example, a five year old Capesize would be changing hands for US$ 35.0m in the secondhand market in October 2003 while during the same period a newbuilding would cost around US$ 42.5m (meaning that the then discount of a 5 year old vessel was only 22%).
So there you have it. The fundamentals seem to be there for Capes this week and while it has been the Panamaxes that have attracted most of the interest over these past couple of months, it seems to be the Capesize market that is promising higher gains thanks to the current market arbitrage. That is all well and good if you can find a noteworthy vessel for sale in this market, because as it seems, as much as there may be a limited number of buyers for Capes, so too is there a shortage of good quality candidates circulating the market. As such, one wonders how much longer these low price levels may last?
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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Sunday, 13 October 13
API 8 CFR SOUTH CHINA COAL - AVERAGE Q4 2013 DELIVERY FELL 0.30 PERCEPT ON WEEK
COALspot.com : API 8 CFR South China Coal swaps for average Q4 2013 delivery fell 0.30 percept week on week on Friday 11 October 2013. The CFR South ...
Saturday, 12 October 13
PANAMAX: OWNERS ARE AT US$ 17-18.5K PER DAY; CHARTERERS ARE AT US$ 15.5-16K - CAPT. REDDY
COALspot.com - The futures market was heavily down on the cape size vessels and the physical average charterer rates on cape size vessels dropped by ...
Friday, 11 October 13
DRY BULK FREIGHT RATE POSITIVE MOMENTUM TO BE SUPPORTED BY HIGHER DEMAND SAYS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
BIMCO released its latest short term research on the shipping markets, estimating that the elevated level of Capesize TC average rates i ...
Friday, 11 October 13
US COAL PRODUCTION FALLS 7.70% IN SEPTEMBER
COALspot.com – United States the world’s second largest coal producer produced approximately 17.70 million short tons (mmst) of coal in ...
Thursday, 10 October 13
NPC AUSTRALIA SHIPPED 2.99 MILLION TONS OF COAL W-O-W
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 12.04 per cent week on week to 2.99 million mt for ...
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- Dalmia Cement Bharat India
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Kobexindo Tractors - Indoneisa
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- Bhoruka Overseas - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
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- Miang Besar Coal Terminal - Indonesia
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
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- Electricity Generating Authority of Thailand
- Sakthi Sugars Limited - India
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- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
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- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Bangladesh Power Developement Board
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- Timah Investasi Mineral - Indoneisa
- European Bulk Services B.V. - Netherlands
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
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- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- London Commodity Brokers - England
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Larsen & Toubro Limited - India
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- LBH Netherlands Bv - Netherlands
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Baramulti Group, Indonesia
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Simpson Spence & Young - Indonesia
- Riau Bara Harum - Indonesia
- Sree Jayajothi Cements Limited - India
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- VISA Power Limited - India
- McConnell Dowell - Australia
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Economic Council, Georgia
- White Energy Company Limited
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Jaiprakash Power Ventures ltd
- Kumho Petrochemical, South Korea
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Parry Sugars Refinery, India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Borneo Indobara - Indonesia
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Billiton Holdings Pty Ltd - Australia
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Latin American Coal - Colombia
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- MS Steel International - UAE
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- PNOC Exploration Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- Gujarat Mineral Development Corp Ltd - India
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- GVK Power & Infra Limited - India
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Australian Commodity Traders Exchange
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Posco Energy - South Korea
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
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