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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, 22 September 13
BDI STRENGTHENS FURTHER AS CAPESIZE FREIGHT RATES JUMP - CAPT. REDDY
COALspot.com: The freight market continued its upward trend and maintaining the moment with BDI and Cape index up by 16 pct week on week. The Capesi ...
Sunday, 22 September 13
API 8 CFR SOUTH CHINA COAL SWAPS ADVANCE
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 ...
Sunday, 22 September 13
SUB-BIT INDONESIA COAL SWAPS REMAIN UNDER PRESSURE
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery down 2.09 percept month on month on Friday 20 September 2 ...
Friday, 20 September 13
SHIP OWNERS INVEST MORE THAN $9.2 BILLION ON NEW BUILDING VESSELS DURING AUGUST - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Despite the fact that August is traditionally a slow month in terms of ships investment activity, ship owners have grasped this year the opportunity ...
Friday, 20 September 13
DRY BULK MARKET REACHES NEW HEIGHTS THIS WEEK STANDING AT THREE-YEAR HIGH - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The biggest rally of the dry bulk market in more than three years have brought back joy among ship owners, especially those active in the Capesize m ...
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- Deloitte Consulting - India
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Thai Mozambique Logistica
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- The State Trading Corporation of India Ltd
- The University of Queensland
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Mercator Lines Limited - India
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- London Commodity Brokers - England
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
- Siam City Cement PLC, Thailand
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- Attock Cement Pakistan Limited
- Carbofer General Trading SA - India
- Mintek Dendrill Indonesia
- PNOC Exploration Corporation - Philippines
- Chamber of Mines of South Africa
- PTC India Limited - India
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Commonwealth Bank - Australia
- Singapore Mercantile Exchange
- Leighton Contractors Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Gujarat Sidhee Cement - India
- Wood Mackenzie - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- India Bulls Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Bhushan Steel Limited - India
- Bayan Resources Tbk. - Indonesia
- Energy Link Ltd, New Zealand
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Merrill Lynch Commodities Europe
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Australian Coal Association
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Finance - Indonesia
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Minerals Council of Australia
- Central Electricity Authority - India
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Price Waterhouse Coopers - Russia
- McConnell Dowell - Australia
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Banpu Public Company Limited - Thailand
- New Zealand Coal & Carbon
- Binh Thuan Hamico - Vietnam
- Kideco Jaya Agung - Indonesia
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