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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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Thursday, 12 September 13
PANAMAX : PACIFIC ROUNDS ARE NOW REPORTED BETWEEN USD 13K AND 15K PER DAY - FEARNRESEARCH
Handy
Nickel ore is a key support SE Asia/Feast rate at the moment; vessel in N.China were fixed around USD 11-12k, ships in mid China can expect a ...
Thursday, 12 September 13
CAPESIZE MARKET WILL BECOME EVEN TIGHTER - JEFFREY LANDSBERG
COALspot.com : While it is no secret that current capesize availability has become tight and has caused capesize rates to surge, availability is set ...
Thursday, 12 September 13
OVER THE WORST? WE MIGHT FIND OUT THIS WEEK - BIMCO
The shipping market has a spring in its step, even as summer draws to a close. There is it seems, confidence that finally, we are emerging into the ...
Thursday, 12 September 13
DRY BULK MARKET RALLY COMES AT A GOOD TIME FOR MOST SHIP OWNERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The latest surge of the dry bulk market has helped offset other lingering factors, which otherwise, could have plunged freight rates to new lows. Fo ...
Wednesday, 11 September 13
ASIA - PACIFIC THERMAL COAL MARKET TO REMAIN OVERSUPPLIED IN NEXT 12 MONTHS - FITCH RATINGS
COALspot.com: Fitch Ratings says the Asia-Pacific thermal coal market will remain oversupplied in the next 12 months because strong production has b ...
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- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Global Business Power Corporation, Philippines
- Indian Energy Exchange, India
- Pendopo Energi Batubara - Indonesia
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Cement Manufacturers Association - India
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Salva Resources Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Tamil Nadu electricity Board
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Pipit Mutiara Jaya. PT, Indonesia
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Borneo Indobara - Indonesia
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Baramulti Group, Indonesia
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Directorate Of Revenue Intelligence - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Vedanta Resources Plc - India
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Thai Mozambique Logistica
- McConnell Dowell - Australia
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- GAC Shipping (India) Pvt Ltd
- Essar Steel Hazira Ltd - India
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Planning Commission, India
- Edison Trading Spa - Italy
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Oldendorff Carriers - Singapore
- Ceylon Electricity Board - Sri Lanka
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kohat Cement Company Ltd. - Pakistan
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Indo Tambangraya Megah - Indonesia
- Romanian Commodities Exchange
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Barasentosa Lestari - Indonesia
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- The University of Queensland
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Power Finance Corporation Ltd., India
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- European Bulk Services B.V. - Netherlands
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Billiton Holdings Pty Ltd - Australia
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Coal and Oil Company - UAE
- Bukit Makmur.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Jorong Barutama Greston.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
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