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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.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Tuesday, 17 September 13
BUMA PRODUCED 3.57 PERCENT MORE COAL IN AUGUST
COALspot.com: BUMA has removed totaled 25.20 million bcm of overburden to produce 2.90 million tons coal in August 2013. BUMI produced 3.07 percent ...
Tuesday, 17 September 13
NEWCASTLE PORT SHIPPED ABOUT 27 PERCENT MORE COAL WEEK ON WEEK
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port up 27.26 per cent week on week to 3.01 million mt for ...
Tuesday, 17 September 13
TAIPOWER INVITES BIDS FOR SUPPLY OF SUB-BITUMINOUS COAL
COALspot.com - Taiwan Power Company intends to procure 1.050 million tons of sub-bituminous coal for Taipower thermal power plant through open tende ...
Tuesday, 17 September 13
ORPHEUS SECURES SIGNIFICANT INFRASTRUCTURE DEAL THROUGH ACQUISITION OF SOUTH KALIMANTAN PORT CAPACITY
COALspot.com : Orpheus Energy Limited (ASX: OEG) of Australia has today announced that, it has executed a binding agreement with the proprietor of S ...
Monday, 16 September 13
WHAT RECOVERY MEANS FOR THE CAPESIZE MARKET - COMMODORE RESEARCH
COALspot.com: The simple fact that capesize rates have been able to increase above the $9,000/mark and become much more responsive to changes in car ...
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- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Meralco Power Generation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- South Luzon Thermal Energy Corporation
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Sical Logistics Limited - India
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Posco Energy - South Korea
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- GVK Power & Infra Limited - India
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Australian Coal Association
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Interocean Group of Companies - India
- Toyota Tsusho Corporation, Japan
- Salva Resources Pvt Ltd - India
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Vedanta Resources Plc - India
- Dalmia Cement Bharat India
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sakthi Sugars Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Australian Commodity Traders Exchange
- Altura Mining Limited, Indonesia
- ASAPP Information Group - India
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Binh Thuan Hamico - Vietnam
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Aditya Birla Group - India
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Energy Development Corp, Philippines
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GAC Shipping (India) Pvt Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Mines - Canada
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Gujarat Sidhee Cement - India
- PNOC Exploration Corporation - Philippines
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Bharathi Cement Corporation - India
- Merrill Lynch Commodities Europe
- LBH Netherlands Bv - Netherlands
- CNBM International Corporation - China
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- IHS Mccloskey Coal Group - USA
- Directorate General of MIneral and Coal - Indonesia
- Cement Manufacturers Association - India
- Star Paper Mills Limited - India
- Planning Commission, India
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Independent Power Producers Association of India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Marubeni Corporation - India
- Economic Council, Georgia
- ICICI Bank Limited - India
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
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