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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, 20 September 13
US COAL PRODUCTION SLIGHTLY UP WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer produced totalled approximately 20.30 million short tons (mmst) of ...
Friday, 20 September 13
COLOMBIA SHIPPED 31.14 MILLION TONS OF THERMAL COAL IN H1
COALspot.com : Colombia’s coal exports fell by 20.59 percent in June 2013 compared to Colombia’s May's export of 7,633,579 MT.
Colom ...
Thursday, 19 September 13
CAPESIZE : AVERAGE DAILY EARNINGS HAVE GAINED ALMOST USD 6K WOW - FEARNLEYS
Handy
The rates in Feast are still firm this week even the activity calmed down a bit as chrtrs are not in a rush to cover even their end Sept carg ...
Wednesday, 18 September 13
IRON ORE AND ZINC ARE BEST PERFORMING MINING SECTORS IN CURRENT LOW PRICE, HIGH COST ENVIRONMENT - WOOD MACKENZIE
With the fall in commodity prices, cash margins in the mining industry have come under pressure. Accordingly, producers and investors are placing in ...
Wednesday, 18 September 13
DRY BULK MARKET CONTINUED TO ADVANCE - INTERMODAL
Chartering (Wet: Stable- / Dry: Firm+ )
The Dry Bulk market continued to advance at a very fast pace, with the BDI closing off the week north ...
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- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Malabar Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Georgia Ports Authority, United States
- Sinarmas Energy and Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Straits Asia Resources Limited - Singapore
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Vijayanagar Sugar Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Marubeni Corporation - India
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Minerals Council of Australia
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- The University of Queensland
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- Latin American Coal - Colombia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Ambuja Cements Ltd - India
- GAC Shipping (India) Pvt Ltd
- Global Coal Blending Company Limited - Australia
- SMG Consultants - Indonesia
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Lanco Infratech Ltd - India
- Orica Australia Pty. Ltd.
- TNB Fuel Sdn Bhd - Malaysia
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Indonesian Coal Mining Association
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Ind-Barath Power Infra Limited - India
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Vedanta Resources Plc - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Gujarat Sidhee Cement - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Australian Coal Association
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- PTC India Limited - India
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Simpson Spence & Young - Indonesia
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- CNBM International Corporation - China
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Bulk Trading Sa - Switzerland
- Altura Mining Limited, Indonesia
- Ministry of Mines - Canada
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- ASAPP Information Group - India
- Meralco Power Generation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Eastern Coal Council - USA
- IHS Mccloskey Coal Group - USA
- Carbofer General Trading SA - India
- Sojitz Corporation - Japan
- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Indika Energy - Indonesia
- Interocean Group of Companies - India
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Baramulti Group, Indonesia
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
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