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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, 29 September 13
SUB-BIT INDONESIA COAL SWAP FELL ON MONTH AND WEEK
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery fell 3.93 percept month on month on Friday 27 September 2 ...
Friday, 27 September 13
TAIWAN'S FORMOSA TO IMPORT 140K MT OF BITUMINOUS COAL FOR Q4
COALspot.com : Taiwan's Formosa Plastics Group is inviting bids for 140,000 mt of bituminous coal for delivery in the Q4 for its China plant.
Ac ...
Friday, 27 September 13
CAPESIZES REGAINING PART OF THEIR FORMER GLORY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The latest dry bulk market rally has been nothing short of spectacular, with freight rates more than doubling over the past few weeks. This growth h ...
Friday, 27 September 13
US PRODUCED 19.30 MMST OF COAL IN SEVEN DAYS
COALspot.com – United States the world’s second largest coal producer produced approximately 19.30 million short tons (mmst) of coal in ...
Thursday, 26 September 13
PANAMAX MARKET CONTINUE WITH STRONG RATES IN BOTH BASINS - FEARNRESEARCH
Handy
Feast rates are still firm, some fresh stems entered the market. Vessels trading around $15k passing Singapore for coal to India, and a bit l ...
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- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Tamil Nadu electricity Board
- Pipit Mutiara Jaya. PT, Indonesia
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Coalindo Energy - Indonesia
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- ASAPP Information Group - India
- Formosa Plastics Group - Taiwan
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PetroVietnam Power Coal Import and Supply Company
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Ceylon Electricity Board - Sri Lanka
- Barasentosa Lestari - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Port Waratah Coal Services - Australia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Petron Corporation, Philippines
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Kapuas Tunggal Persada - Indonesia
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- India Bulls Power Limited - India
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Singapore Mercantile Exchange
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- Romanian Commodities Exchange
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Dalmia Cement Bharat India
- Salva Resources Pvt Ltd - India
- Commonwealth Bank - Australia
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Karaikal Port Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Electricity Authority, New Zealand
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Vedanta Resources Plc - India
- Australian Coal Association
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Binh Thuan Hamico - Vietnam
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Parliament of New Zealand
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- GN Power Mariveles Coal Plant, Philippines
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