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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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Friday, 04 October 13
US COAL PRODUCTION UP 2.1% WEEK ON WEEK - EIA
COALspot.com – United States the world’s second largest coal producer produced approximately 19.70 million short tons (mmst) of coal in ...
Thursday, 03 October 13
INDONESIA AUGUST COAL EXPORTS FALL 12.90 % FROM JULY TO 30.71 MIL MT
COALspot.com: Indonesia, the 15th largest economy in world, 4th largest coal producer in world and world's largest multi grade coal exporter ...
Thursday, 03 October 13
TOP FOUR U.S. COAL COMPANIES SUPPLIED MORE THAN HALF OF U.S. COAL PRODUCTION IN 2011 - EIA
In the past two years, more than half of U.S. coal production was attributable to the top four coal producers, the result of changes in regional pro ...
Thursday, 03 October 13
HANDY: PERIOD MARKET STAND IN GOOD POSITION - FEARNRESEARCH
Handy
Nickel ore and Bauxite was active last week but slowed down now due to Chinese holidays. Ships opened in North China fixed at US$ 11-13k leve ...
Wednesday, 02 October 13
DRY BULK MARKET IS STILL MAINTAINING ITS UPWARD DIRECTION
Chartering (Wet: Stable- / Dry: Firm+)
Despite the fact that rates for Capes didn't continue their crazy ride this past week, the Dry Bulk market ...
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- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Meralco Power Generation, Philippines
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Central Java Power - Indonesia
- The University of Queensland
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Planning Commission, India
- Electricity Authority, New Zealand
- Semirara Mining Corp, Philippines
- Uttam Galva Steels Limited - India
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Riau Bara Harum - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- Oldendorff Carriers - Singapore
- McConnell Dowell - Australia
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Global Coal Blending Company Limited - Australia
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- PTC India Limited - India
- Sakthi Sugars Limited - India
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Kumho Petrochemical, South Korea
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Agrawal Coal Company - India
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- PNOC Exploration Corporation - Philippines
- Australian Coal Association
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Petron Corporation, Philippines
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Rio Tinto Coal - Australia
- Baramulti Group, Indonesia
- Jaiprakash Power Ventures ltd
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Parliament of New Zealand
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Sical Logistics Limited - India
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- The State Trading Corporation of India Ltd
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Africa Commodities Group - South Africa
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
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