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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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Tuesday, 10 September 13
COAL EXPORTS AT AUSTRALIA'S NEWCASTLE PORT SLIP 30.31% ON WEEK TO 2.36 MMT
COALspot.com: Power plant and semi-soft coking coal shipments from Australia's Newcastle port down 30.31 per cent week on week to 2.36 million mt f ...
Tuesday, 10 September 13
WORLDWIDE COAL CONSUMPTION RISES SHARPLY - RA DR. ERICH SCHMITZ
By: RA Dr. Erich Schmitz, Verein der Kohlenimporteure (Germany Coal Importers Association)
World hard coal market in the first half of 2013: worl ...
Monday, 09 September 13
REBOUND IN NEWBUILDING ORDERS HASN'T HURT DRY BULK MARKET PROSPECTS, BUT SHIP OWNERS SHOULD STILL BE CAUTIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Since the start of 2013 and up until the end of August, one thing has really caught the headlines in the dry bulk market, except of course, the frei ...
Sunday, 08 September 13
Q3 2014 THERMAL COAL SWAPS : STEADY DIRECTION
COALspot.com – Sub-Bit Indonesia coal swap (FOB ) for average Q4 2013 delivery up 1.88 percent month on month. The swap was moved ...
Sunday, 08 September 13
BALTIC INDEX UP ON HIGHER CAPESIZE, PANAMAX RATES
COALspot.com : The freight market continued saw one of the biggest rally last week with Cape Size taking the lead followed by Panamax.
The BDI wa ...
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- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- New Zealand Coal & Carbon
- Leighton Contractors Pty Ltd - Australia
- GN Power Mariveles Coal Plant, Philippines
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Electricity Generating Authority of Thailand
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- Star Paper Mills Limited - India
- Vizag Seaport Private Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Parry Sugars Refinery, India
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- McConnell Dowell - Australia
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Interocean Group of Companies - India
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- MS Steel International - UAE
- Romanian Commodities Exchange
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Malabar Cements Ltd - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Independent Power Producers Association of India
- Ind-Barath Power Infra Limited - India
- SMC Global Power, Philippines
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- India Bulls Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Pendopo Energi Batubara - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Mjunction Services Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- ICICI Bank Limited - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- CIMB Investment Bank - Malaysia
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- London Commodity Brokers - England
- Metalloyd Limited - United Kingdom
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Kartika Selabumi Mining - Indonesia
- South Luzon Thermal Energy Corporation
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- GAC Shipping (India) Pvt Ltd
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Orica Australia Pty. Ltd.
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Planning Commission, India
- Africa Commodities Group - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Electricity Authority, New Zealand
- Meralco Power Generation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Edison Trading Spa - Italy
- Sindya Power Generating Company Private Ltd
- Bharathi Cement Corporation - India
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Bhatia International Limited - India
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Indika Energy - Indonesia
- Baramulti Group, Indonesia
- Indian Oil Corporation Limited
- Sarangani Energy Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Deloitte Consulting - India
- Uttam Galva Steels Limited - India
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Posco Energy - South Korea
- Georgia Ports Authority, United States
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
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