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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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Thursday, 10 October 13
SEVERAL PANAMAX FIXTURES FOR 1 YEAR TC HAVE BEEN REPORTED AROUND $13.5K/DAY - FEARNRESEARCH
Handy
The market is not much fancy as several holidays in the Far East last week. Tonnage side seems tight in SE Asia but there are many of them in ...
Wednesday, 09 October 13
PANAMAX: FIRM ; FIXING ACTIVITY INCREASED IN BOTH BASINS - INTERMODAL
This was another week of gains for the Dry Bulk market, albeit very modest ones compared to the previous ones. Charterers and owners struggled for t ...
Tuesday, 08 October 13
CHINA: INTENSE COMPETITION AMONG DOMESTIC COAL MINERS AS 2013 IMPORT DEMAND REMAINS STRONG - WOOD MACKENZIE
Prices will not fall under RMB500/t or risk supply availability to the coastal market
Despite China's lower economic growth, Wood Mackenzie says ...
Monday, 07 October 13
RICHARD BAY COAL TERMINAL SHIPPED 49.94 MMT OF COAL YTD
COALspot.com - Richards Bay Coal Terminal (RBCT), the world's single largest coal terminal has shipped 49,946,509 mt of coals YTD, according to por ...
Monday, 07 October 13
SOUTH AFRICA'S RBCT SHIPPED 7.94% MORE COAL IN SEPT' 13
COALspot.com - Richards Bay Coal Terminal (RBCT), the single largest coal export terminal in South Africa as well as in the world has shipped 7.94 p ...
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- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Chamber of Mines of South Africa
- Standard Chartered Bank - UAE
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- ICICI Bank Limited - India
- Timah Investasi Mineral - Indoneisa
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- The University of Queensland
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Vijayanagar Sugar Pvt Ltd - India
- Tamil Nadu electricity Board
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Larsen & Toubro Limited - India
- Bharathi Cement Corporation - India
- Indian Oil Corporation Limited
- Agrawal Coal Company - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- GVK Power & Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- Cigading International Bulk Terminal - Indonesia
- Aboitiz Power Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Marubeni Corporation - India
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Bukit Makmur.PT - Indonesia
- Global Coal Blending Company Limited - Australia
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Port Waratah Coal Services - Australia
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Altura Mining Limited, Indonesia
- Eastern Energy - Thailand
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- VISA Power Limited - India
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Maheswari Brothers Coal Limited - India
- Wood Mackenzie - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Trasteel International SA, Italy
- Eastern Coal Council - USA
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- International Coal Ventures Pvt Ltd - India
- PTC India Limited - India
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Planning Commission, India
- The Treasury - Australian Government
- Karbindo Abesyapradhi - Indoneisa
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- New Zealand Coal & Carbon
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- San Jose City I Power Corp, Philippines
- Bulk Trading Sa - Switzerland
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Posco Energy - South Korea
- India Bulls Power Limited - India
- Therma Luzon, Inc, Philippines
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Central Java Power - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Toyota Tsusho Corporation, Japan
- Bayan Resources Tbk. - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Tata Chemicals Ltd - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Independent Power Producers Association of India
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Transport, Egypt
- Coalindo Energy - Indonesia
- Orica Mining Services - Indonesia
- Oldendorff Carriers - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Savvy Resources Ltd - HongKong
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