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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, 16 July 14
INDIA BUDGET HAS LIMITED SHORT TERM IMPACT ON POWER SECTOR - FITCH RATINGS
Fitch Ratings says that the measures announced relating to India's electricity sector in the budget for FY2015 are directionally correct but in ...
Wednesday, 16 July 14
WEEKLY SHIPPING MARKET INSIGHT - INTERMODAL
Wake me up when September ends - Theodore Ntalakos
Since last September most thought that the worst was behind us. It looks like the market de ...
Tuesday, 15 July 14
INDONESIA'S TOTAL COAL PRODUCTION REACHED ANOTHER HIGH DURING THE FIRST SIX MONTHS; GOVERNMENT EXPECTED TO RAISE ROYALTIES
COALspot.com: Indonesia's total coal production reached 213 million tons during January through June, up by 7.6 percent y-o-y. Coal output in I ...
Monday, 14 July 14
THE END OF THE ERA OF HEAVY FUEL OIL IN MARITIME SHIPPING - ICCT
KNOWLEDGE TO ELEVATE
Since the 1960s, heavy fuel oil (HFO) has been the king of marine fuels. Viscous, dirty, yet inexpensive and widely avail ...
Monday, 14 July 14
SGX SUB-BIT FOB INDONESIA COAL SWAP FOR Q4' 14 DELIVERY CLOSED AT $ 54.80
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on day, week and on month according to AsiaClear OTC coal swap's reports re ...
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- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Agrawal Coal Company - India
- PowerSource Philippines DevCo
- Bharathi Cement Corporation - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- GAC Shipping (India) Pvt Ltd
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Attock Cement Pakistan Limited
- White Energy Company Limited
- Deloitte Consulting - India
- Australian Coal Association
- Madhucon Powers Ltd - India
- Planning Commission, India
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Cement Manufacturers Association - India
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Makmur.PT - Indonesia
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- The Treasury - Australian Government
- Commonwealth Bank - Australia
- Meralco Power Generation, Philippines
- Straits Asia Resources Limited - Singapore
- Global Green Power PLC Corporation, Philippines
- Videocon Industries ltd - India
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Indika Energy - Indonesia
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- SMC Global Power, Philippines
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Mercator Lines Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- VISA Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Intertek Mineral Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ambuja Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- PTC India Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- Interocean Group of Companies - India
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Samtan Co., Ltd - South Korea
- Xindia Steels Limited - India
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Toyota Tsusho Corporation, Japan
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Borneo Indobara - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- TeaM Sual Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indo Tambangraya Megah - Indonesia
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Trasteel International SA, Italy
- Posco Energy - South Korea
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