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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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Monday, 16 September 13
CFR SOUTH CHINA COAL SWAP: STABLE TO STEADY
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 ...
Monday, 16 September 13
INDONESIAN SUB-BIT COAL SWAP STRUGGLING TO FINDS THE RIGHT PATH
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery down 0.75 percept month on month on Friday 13 Septe ...
Sunday, 15 September 13
CAPE FREIGHT RATES RISE ON HIGH DEMAND AND TIGHT AVAILABILITY - CAPT. REDDY
COALspot.com : The BDI, Cape and Panamax indices are continued to rise and saw a steep surge with average index in these segments up around 25 pct w ...
Friday, 13 September 13
US COAL OUTPUT SLIPS 3.34% ON-WEEK
COALspot.com – United states the world’s second largest coal producer produced totaled approximately 20.20 million short tons (mmst) of ...
Friday, 13 September 13
DIRECTOR GENERAL OF MINERAL AND COAL OF INDONESIA REVISED UP COAL PRICE REFERENCE TO US$ 76.89
COALspot. com - The Indonesian government has revised up its owned coal bench mark price by US$ 0.19/ MT to US$ 76.89 for September 2013 deliveries ...
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- Metalloyd Limited - United Kingdom
- Energy Development Corp, Philippines
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- SMC Global Power, Philippines
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Thai Mozambique Logistica
- Altura Mining Limited, Indonesia
- Ministry of Transport, Egypt
- Kaltim Prima Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Deloitte Consulting - India
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- MS Steel International - UAE
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Bayan Resources Tbk. - Indonesia
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Timah Investasi Mineral - Indoneisa
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Coastal Gujarat Power Limited - India
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Ministry of Mines - Canada
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- European Bulk Services B.V. - Netherlands
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Tamil Nadu electricity Board
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Mjunction Services Limited - India
- The University of Queensland
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Bank of Tokyo Mitsubishi UFJ Ltd
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Independent Power Producers Association of India
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Renaissance Capital - South Africa
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Videocon Industries ltd - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Heidelberg Cement - Germany
- Jindal Steel & Power Ltd - India
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- IEA Clean Coal Centre - UK
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Indo Tambangraya Megah - Indonesia
- Savvy Resources Ltd - HongKong
- Marubeni Corporation - India
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- White Energy Company Limited
- Siam City Cement - Thailand
- Price Waterhouse Coopers - Russia
- Agrawal Coal Company - India
- Billiton Holdings Pty Ltd - Australia
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bhushan Steel Limited - India
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Thiess Contractors Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- SMG Consultants - Indonesia
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
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