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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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Thursday, 12 June 14
CONSOLIDATION IS THE ' NAME OF THE GAME' WHEN IT COMES TO SHIPYARDS ACROSS ASIA - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Intense competition, a swelling of new greenfield shipyards over the past few years mainly in China, especially prior to the 2008 global financial ...
Wednesday, 11 June 14
INDONESIA'S COAL EXPORT VOLUME AND REVENUE SLIPS 2.75% AND 6.73% RESPECTIVELY IN APRIL
COALspot.com: Indonesia, one of the world's largest coal producer and the global largest multi grade coal exporter shipped around $1.8* b ...
Wednesday, 11 June 14
BPI TOUCHING A NEW LOW FOR THE YEAR
The Dry Bulk market closed off the week positively, on the back of firming Capesize rates, while the market overall continues to face a very challe ...
Monday, 09 June 14
GOVT GETS TOUGH ON ILLEGAL MINING, SUSPENDS LICENSES - THE JAKARTA POST
The government has temporarily suspended the licenses of 62 mineral and coal transportation companies as part of its efforts to curb illegal mining ...
Monday, 09 June 14
INDO SUB-BIT COAL SWAPS FOR Q3,Q4 OF 2014 AND Q1 2015: LOST ON DAY AND MONTH
COALspot.com: Indonesian coal swaps for average Q3’ 2014 continue last week’s trend or lost on day, week and on month according to Asia ...
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- Bhatia International Limited - India
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- India Bulls Power Limited - India
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- GVK Power & Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- Trasteel International SA, Italy
- Australian Commodity Traders Exchange
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- The University of Queensland
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Therma Luzon, Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Coastal Gujarat Power Limited - India
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Singapore Mercantile Exchange
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Thai Mozambique Logistica
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- Borneo Indobara - Indonesia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Baramulti Group, Indonesia
- PNOC Exploration Corporation - Philippines
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Asmin Koalindo Tuhup - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Merrill Lynch Commodities Europe
- Orica Mining Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Electricity Authority, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Xindia Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Lanco Infratech Ltd - India
- Indo Tambangraya Megah - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Minerals Council of Australia
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- The Treasury - Australian Government
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Eastern Coal Council - USA
- Economic Council, Georgia
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Mercuria Energy - Indonesia
- Thiess Contractors Indonesia
- Carbofer General Trading SA - India
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Ambuja Cements Ltd - India
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Rio Tinto Coal - Australia
- VISA Power Limited - India
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- IHS Mccloskey Coal Group - USA
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- Commonwealth Bank - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Tamil Nadu electricity Board
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Aditya Birla Group - India
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
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