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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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Sunday, 20 July 14
THE FREIGHT MARKET CONTINUED ITS DOWNWARD TREND
COALspot.com: The market continued its downward trend this week as all segments were down compared to last week. The Cape and Panamax indices being ...
Friday, 18 July 14
3RD CHINA INTERNATIONAL SHALE GAS SUMMIT
Building on the massive success of the past 2 shale gas programs that has generated huge success by attracting 500+ industry players, and intrig ...
Friday, 18 July 14
US WEEKLY COAL PRODUCTION UP BY 1.4% TO 18.3 MMST
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 17 July 14
PANAMAX : MARKET HAS COOLED DOWN AGAIN TO LOW AND DEPRESSED LEVELS
Handy
The supra market remains pretty flat in the Atlantic while for the smaller sizes there has been little reported with ships chasing business ...
Thursday, 17 July 14
INDIAN GOVERNMENT WISE TO TAKE ADVANTAGE OF CURRENTLY LOW THERMAL COAL PRICES AND SHIPPING RATES - JEFFREY LANDSBERG
With thermal coal import prices (and also shipping rates) very low at present, India's government would be very wise to take advantage of curre ...
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- Antam Resourcindo - Indonesia
- The Treasury - Australian Government
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- Renaissance Capital - South Africa
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Bhoruka Overseas - Indonesia
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Posco Energy - South Korea
- Ministry of Mines - Canada
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Makarim & Taira - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Banpu Public Company Limited - Thailand
- Gujarat Sidhee Cement - India
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- PTC India Limited - India
- Australian Coal Association
- Savvy Resources Ltd - HongKong
- Indo Tambangraya Megah - Indonesia
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- The State Trading Corporation of India Ltd
- Sical Logistics Limited - India
- Central Electricity Authority - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Orica Mining Services - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mjunction Services Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Chettinad Cement Corporation Ltd - India
- Videocon Industries ltd - India
- Georgia Ports Authority, United States
- The University of Queensland
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- ASAPP Information Group - India
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Mintek Dendrill Indonesia
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Indian Energy Exchange, India
- Kumho Petrochemical, South Korea
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Planning Commission, India
- Miang Besar Coal Terminal - Indonesia
- Ambuja Cements Ltd - India
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Petron Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Kobexindo Tractors - Indoneisa
- London Commodity Brokers - England
- Tamil Nadu electricity Board
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- Pipit Mutiara Jaya. PT, Indonesia
- Straits Asia Resources Limited - Singapore
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Ministry of Transport, Egypt
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Trasteel International SA, Italy
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Essar Steel Hazira Ltd - India
- Coastal Gujarat Power Limited - India
- Cement Manufacturers Association - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
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