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Wednesday, 09 July 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
 The mini-boom in dry bulker values catapulted ship prices too fast too far over the last one-and-a-half year. The concurrence of historically low prices in both second-hand and newbuilding markets, which approached the post Asian crisis lows in inflation-adjusted terms, offered the perfect background for asset play, but this is much easier said than done.
Most real-world buy-low-sell-higher cases concentrated on the flipping of newbuildings contracted at rock-bottom prices when we witnessed Handysize Newbuildings at sub-20musd levels, Ultramaxes at sub-24musd, Kamsarmaxes at rgn 26musd, and Capes at low-mid 40s. Notably, Cargill penned in May 2013 3x180kdwt Capes at SWS, acknowledging they would not operate these ships forever, and by the end of the same year sold them to Scorpio at 57musd each at a stunning rgn10musd profit per vessel. Oldendorff purchased a Crown-63 resale in late 2012 for mid-24s and after trading her, sold her for rgn31musd to Greeks. The same interests recently sold to Diana, a 180k Capesize resale under construction at Qingdao Beihai, for 58musd and a profit in excess of 10musd.
S&P-wise, the appreciation was spectacular on all dry asset classes last year. Regarding LME Panamaxes, ex-Ocean Planet (‘05 Sasebo) was committed in January 2013 by Chartworld at sub-m$15 while ex-Ocean Lily (’06 Imabari) was sold to Sanko close to 25musd this March, resulting in a 2/3 value appreciation in 14mos. While initial appreciation was substantiated, it went on irrationally (mimicry, artificial liquidity by the speculative funds, fear of ‘losing’ the market or even having money in the bank, taxation considerations, low interest rates, etc). On a few S&P asset play cases, in late 2012 Norwegian interests committed the 2006-built Tsuneishi Kamsarmax ex ‘Mizunagi Maru’ arnd 18.4musd and sold her a year later at 23.5musd to Greek interests enjoying a 5musd profit. Chinese owners also got on the bandwagon, having sold two late 90s Capes (m/v Lian Fu Star and m/v Tai Fu Star) to Ukrainians at mid/high teens recording a profit of rgn/xs 5musd per vessel in less than a year.
The current price correction is evidenced by the sale of the ‘Yusho Spica’ at rgn 20musd marked an abrupt 5musd discount from her same-year built sister ‘Ocean Lily’ 3 months ago. This brings asset values back to May 2013 when the ex-Shoyo (76k ’06 Namura) was sold at 20.25musd to Diana. Most likely, the current correction will not break soon the previous lows, because the costs of creating a new asset, ie, newbuilding prices, are well above previous lows and there are still many buyers/funds getting ready to step in, should a further correction in asset values occurs.
Well-timed acquisitions materialize when the others are fearful, when the banks do not lend money, when speculative money becomes disappointed. Nobody knows where we are heading but the recent past has benchmarked a lower bound for assets. As such, there may be longer-term value in modern S&P deals priced up to a 20% premium above the rock-bottom (e.g. a 2006/7 Japanese built Panamax BC at 18musd) and at a respective 10% premium for newbuildings (e.g., rgn/sub 29-30musd for Kamsa NBs from top Chinese yards). We may be getting close to there, but there are strong resistance forces as well.
Perhaps the wildest scenario would arise if the freight market stays depressed for another year and asset prices deteriorate further. What would then be the reaction of the speculative funds that, having a short-term investment horizon anyway, may massively look for an exit? In case this happens, it may signal the biggest asset play opportunity in the coming years.
By Panos Tsilingiris - SnP Broker
Analysts:
Mr. George Lazaridis
Ms. Eva Tzima
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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Wednesday, 23 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
In Australia, the world’s largest mining group, BHP Billiton, will beat the iron ore export target of more than 220 million tonnes for 2014. ...
Wednesday, 23 July 14
HARD COAL 2013: THE WORLD'S SECOND-MOST IMPORTANT ENERGY SOURCE AND GUARANTOR FOR THE SECURITY OF ENERGY SUPPLIES DURING TIMES OF CRISIS
Hard coal is again in 2013 the fastest-growing fossil primary energy source in the world. As shown in the BP Statistical Review 2014, it covered ab ...
Tuesday, 22 July 14
INDONESIAN ELECTION RESULT ENCOURAGING FOR FOREIGN INVESTMENT IN ENERGY AND MINING SECTORS - WOOD MACKENZIE
Joko Widodo-Jusuf Kalla has been announced as the official winner of Indonesia's presidential election. Joko Widodo, or Jokowi, is viewed as a ...
Tuesday, 22 July 14
THE CURRENT COAL PRICES ARE UNPROFITABLE FOR MINERS; COAL PRICES WILL GRADUALLY INCREASE - FITCH
COALspot.com: The Fitch Ratings expect the benchmark Newcastle coal prices (currently at about USD70/MT) to gradually increase.
Fitch's la ...
Tuesday, 22 July 14
SUB-BIT FOB INDONESIA COAL Q3' 14 DOWN 5.21%; Q4' 14 DOWN 3.56%; Q1' 15 DOWN 4.75% M-O-M
COALspot.com: Indonesian coal swaps for average Q3’ 2014 flat on day, weak week on week and on month according to AsiaClear OTC coal swap' ...
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- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Kohat Cement Company Ltd. - Pakistan
- Siam City Cement - Thailand
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- White Energy Company Limited
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Samtan Co., Ltd - South Korea
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Australian Coal Association
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Kapuas Tunggal Persada - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- India Bulls Power Limited - India
- Romanian Commodities Exchange
- The University of Queensland
- Larsen & Toubro Limited - India
- Posco Energy - South Korea
- Asmin Koalindo Tuhup - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Kobexindo Tractors - Indoneisa
- Africa Commodities Group - South Africa
- Parry Sugars Refinery, India
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Sical Logistics Limited - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- International Coal Ventures Pvt Ltd - India
- Borneo Indobara - Indonesia
- Oldendorff Carriers - Singapore
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Trasteel International SA, Italy
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Singapore Mercantile Exchange
- Orica Australia Pty. Ltd.
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Tata Chemicals Ltd - India
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Pipit Mutiara Jaya. PT, Indonesia
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Agrawal Coal Company - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Sinarmas Energy and Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- MS Steel International - UAE
- ICICI Bank Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Central Electricity Authority - India
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Carbofer General Trading SA - India
- PowerSource Philippines DevCo
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Miang Besar Coal Terminal - Indonesia
- Standard Chartered Bank - UAE
- Planning Commission, India
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Economic Council, Georgia
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Orica Mining Services - Indonesia
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Bharathi Cement Corporation - India
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Cement Manufacturers Association - India
- Indian Energy Exchange, India
- Indika Energy - Indonesia
- Vizag Seaport Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- LBH Netherlands Bv - Netherlands
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Bhatia International Limited - India
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