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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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Wednesday, 02 October 13
HOW LONG WILL THIS LATEST CAPESIZE RALLY LAST? - TASOS PAPADOPOULOS
By Tasos Papadopoulos, SnP Broker, Intermodal
The surge in iron ore trade has translated into a massive boost in daily earnings for capes; with t ...
Tuesday, 01 October 13
DRY BULK MARKET POISED FOR RETREAT ON CHINA HOLIDAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The start of a national weeklong in China as of Tuesday is expected to put a lid in the latest rally of the dry bulk freight market, as has always b ...
Monday, 30 September 13
NEWCASTLE'S COAL EXPORT VOLUME CONTINUES TO SLIP
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port fell 8.38 per cent week on week to 2.67 million mt fo ...
Monday, 30 September 13
PANAMAX CHARTER RATES TOUCHING US$ 18K FOR A TRIP TO NOPAC - CAPT. REDDY
COALspot.com : The freight market continued to remain firm, BDI and the Panamax index up week ended 27 September 2013.
The cape index was fell to ...
Sunday, 29 September 13
API 8 CFR SOUTH CHINA COAL Q3 2014 DELIVERY SWAP GAINED $1.19 M-O-M
COALspot.com : SGX has launched API 8 CFR South China Coal Swap on 29 April 2013 and SGX replaced the previous swap.
API 8 CFR South China Coal s ...
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- Meenaskhi Energy Private Limited - India
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Australian Coal Association
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Larsen & Toubro Limited - India
- New Zealand Coal & Carbon
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- White Energy Company Limited
- Semirara Mining and Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Global Coal Blending Company Limited - Australia
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Antam Resourcindo - Indonesia
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Binh Thuan Hamico - Vietnam
- Leighton Contractors Pty Ltd - Australia
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Bayan Resources Tbk. - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Medco Energi Mining Internasional
- Indian Oil Corporation Limited
- Parliament of New Zealand
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bangladesh Power Developement Board
- PTC India Limited - India
- Tamil Nadu electricity Board
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Minerals Council of Australia
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Maheswari Brothers Coal Limited - India
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Parry Sugars Refinery, India
- Sojitz Corporation - Japan
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Mintek Dendrill Indonesia
- Malabar Cements Ltd - India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- South Luzon Thermal Energy Corporation
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Metalloyd Limited - United Kingdom
- Kideco Jaya Agung - Indonesia
- GAC Shipping (India) Pvt Ltd
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Barasentosa Lestari - Indonesia
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- Energy Development Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Ind-Barath Power Infra Limited - India
- Ministry of Finance - Indonesia
- Videocon Industries ltd - India
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