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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, 23 June 14
COAL SWAPS DROPS FURTHER MONTH ON MONTH ON WEAK DEMAND
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 6.91 percent month on month and closed at US$ 69.00 per mt a ...
Sunday, 22 June 14
THE PANAMAX COAL FREIGHT FROM INDONESIA TO INDIA SLIPPED THIS WEEK
COALspot.com: The Baltic Exchange's main sea freight index, which tracks rates for ships carrying dry bulk commodities, fell slightly on Friday ...
Friday, 20 June 14
DRY BULK MARKET LOOKING FOR UPSIDE ON ROBUST SEABORNE IRON ORE TRADE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market hasn’t been able to justify the heightened expectations this year. Yesterday, the Baltic Dry Index managed to inch forwar ...
Friday, 20 June 14
US WEEKLY COAL PRODUCTION DROPS 1.8% WEEK ON WEEK
COALspot.com – United States the world's second largest coal producer, produced approximately 18.3 million short tons (mmst) of coal in a ...
Thursday, 19 June 14
PANAMAX: VERY CLOSE TO BREAKING THE ALL TIME LOW RECORD - FEARNLEYS AS
Handy
The Supra-Handy market is experiencing the same market slow down as its bigger sister markets however not to the same extent. We see TA rat ...
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- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- SMG Consultants - Indonesia
- Planning Commission, India
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- Ministry of Transport, Egypt
- Sojitz Corporation - Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Salva Resources Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Indo Tambangraya Megah - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- South Luzon Thermal Energy Corporation
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Binh Thuan Hamico - Vietnam
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Larsen & Toubro Limited - India
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Agrawal Coal Company - India
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Madhucon Powers Ltd - India
- Leighton Contractors Pty Ltd - Australia
- International Coal Ventures Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Marubeni Corporation - India
- White Energy Company Limited
- Bayan Resources Tbk. - Indonesia
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- San Jose City I Power Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- Directorate General of MIneral and Coal - Indonesia
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement - Thailand
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Kideco Jaya Agung - Indonesia
- Metalloyd Limited - United Kingdom
- New Zealand Coal & Carbon
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GMR Energy Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Singapore Mercantile Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bulk Trading Sa - Switzerland
- CIMB Investment Bank - Malaysia
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- Baramulti Group, Indonesia
- Bharathi Cement Corporation - India
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Rio Tinto Coal - Australia
- Intertek Mineral Services - Indonesia
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Iligan Light & Power Inc, Philippines
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Deloitte Consulting - India
- Borneo Indobara - Indonesia
- Petron Corporation, Philippines
- Economic Council, Georgia
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
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