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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, 26 May 14
Q3 14 CFR SOUTH CHINA COAL SWAPS LOST 2.24% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.24 percent month on month and closed at US$ 73.88 per mt as on F ...
Monday, 26 May 14
NEWBUILDING ORDERING ACTIVITY RISES BY 78% IN DWT TONNAGE OVER THE FIRST 4 MONTHS OF THE YEARS, AS OWNERS INVEST$40.5 BN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Ship owners have plunged into newbuilding orders during the first four months of the year, as overall newbuilding business ended for the first four ...
Sunday, 25 May 14
FREIGHT RATES FROM SOUTH KALIMANTAN TO EAST COAST INDIAN PORTS WERE ASSESSED AT $9.50/MT
COALspot.com: The BDI was closed at 964 points down by 6.13 pct week on week. The Cape Index was lost 172 points or 11.24% week on week and closing ...
Saturday, 24 May 14
DRY BULK MARKET'S RECOVERY IS JUST AROUND THE CORNER SAYS SHIPOWNER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the weaker than expected market sentiment in the dry bulk market over the course of the past few months, analysts and shipowners alike appe ...
Friday, 23 May 14
U.S. WEEKLY COAL PRODUCTION SLIPS 1.8% WEEK ENDED MAY 17, 2014
COALspot.com – United States the world's second largest coal producer, produced approximately 18.6 million short tons (mmst) of coal in a ...
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- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- McConnell Dowell - Australia
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Parliament of New Zealand
- Central Electricity Authority - India
- India Bulls Power Limited - India
- PTC India Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- South Luzon Thermal Energy Corporation
- Electricity Generating Authority of Thailand
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Ministry of Finance - Indonesia
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- Malabar Cements Ltd - India
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Latin American Coal - Colombia
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Indogreen Group - Indonesia
- Mintek Dendrill Indonesia
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Tata Chemicals Ltd - India
- Georgia Ports Authority, United States
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Samtan Co., Ltd - South Korea
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- Sree Jayajothi Cements Limited - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- The Treasury - Australian Government
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Kepco SPC Power Corporation, Philippines
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Meralco Power Generation, Philippines
- Directorate Of Revenue Intelligence - India
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Anglo American - United Kingdom
- Bangladesh Power Developement Board
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- Rio Tinto Coal - Australia
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- GAC Shipping (India) Pvt Ltd
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Riau Bara Harum - Indonesia
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Metalloyd Limited - United Kingdom
- Borneo Indobara - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Simpson Spence & Young - Indonesia
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- Central Java Power - Indonesia
- Global Green Power PLC Corporation, Philippines
- Economic Council, Georgia
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Sindya Power Generating Company Private Ltd
- Xindia Steels Limited - India
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Jorong Barutama Greston.PT - Indonesia
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Videocon Industries ltd - India
- CNBM International Corporation - China
- Romanian Commodities Exchange
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
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