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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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Monday, 30 June 14
INDO - INDIA FREIGHT RATES CONTINUE TO WEAK
COALspot.com: The latest dry Index shows that average all-in spot freight declined, the Panamax and Supramax slipping by 9.11 percent and 4% respec ...
Friday, 27 June 14
DRY BULK MARKET STILL LOOKING FOR UPSIDE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has kept up its lacklustre performance during the past week, as evidenced by the course of the Baltic Dry Index (BDI). The BDI ...
Thursday, 26 June 14
PANAMAX : A PACIFIC ROUND PAYS AROUND US$ 3K DAILY - FEARNLEYS AS
Handy
In the Atlantic there has been little activity which again has caused rates to slip across all trades. TA´s are now down to US$ 5,500 ...
Thursday, 26 June 14
KOMIPO INVITES BIDS FOR TOTAL 750K MT OF BITUMINOUS COAL FOR 3CY
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) has issued a new tender for supply of total 250,000 MT of bituminous co ...
Thursday, 26 June 14
COAL DIVESTMENT CAMPAIGNS COME WITH RISKY UNINTENDED CONSEQUENCES - WCA
Last week I presented to the Expert Group on investments in coal and petroleum companies, the body set up to advise the Norwegian Government on whe ...
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- PetroVietnam Power Coal Import and Supply Company
- Indonesian Coal Mining Association
- TNB Fuel Sdn Bhd - Malaysia
- Intertek Mineral Services - Indonesia
- Parry Sugars Refinery, India
- Planning Commission, India
- Deloitte Consulting - India
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Finance - Indonesia
- Petron Corporation, Philippines
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Maharashtra Electricity Regulatory Commission - India
- VISA Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- MS Steel International - UAE
- CIMB Investment Bank - Malaysia
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Riau Bara Harum - Indonesia
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Kartika Selabumi Mining - Indonesia
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Chettinad Cement Corporation Ltd - India
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Marubeni Corporation - India
- PTC India Limited - India
- Coal and Oil Company - UAE
- PowerSource Philippines DevCo
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- TeaM Sual Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Thiess Contractors Indonesia
- Ministry of Mines - Canada
- Rashtriya Ispat Nigam Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Bulk Trading Sa - Switzerland
- European Bulk Services B.V. - Netherlands
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- OPG Power Generation Pvt Ltd - India
- Mjunction Services Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kideco Jaya Agung - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GVK Power & Infra Limited - India
- Bayan Resources Tbk. - Indonesia
- White Energy Company Limited
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Toyota Tsusho Corporation, Japan
- London Commodity Brokers - England
- Bharathi Cement Corporation - India
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Meralco Power Generation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Banpu Public Company Limited - Thailand
- Formosa Plastics Group - Taiwan
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- The University of Queensland
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- AsiaOL BioFuels Corp., Philippines
- Georgia Ports Authority, United States
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Metalloyd Limited - United Kingdom
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Independent Power Producers Association of India
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Iligan Light & Power Inc, Philippines
- McConnell Dowell - Australia
- Anglo American - United Kingdom
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Vizag Seaport Private Limited - India
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Economic Council, Georgia
- Central Electricity Authority - India
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Siam City Cement - Thailand
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
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