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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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Tuesday, 20 May 14
NEWCASTLE'S COAL EXPORT VOLUME UP 39.11 PERCENT WEEK ON WEEK
COALspot.com: In the week ended 07:00 hours 19 May 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, ...
Tuesday, 20 May 14
DRY BULK MARKET TO IMPROVE OVER THE COURSE OF 2014, BUT OVERSUPPLY STILL AN ISSUE SAYS BIMCO'S CHIEF SHIPPING ANALYST
As a gruelling first quarter edges closer to the end, dry bulk ship owners are looking at an improved second quarter demand, which, coupled with sl ...
Tuesday, 20 May 14
DRY BULK MARKET IS BOUND FOR A RECOVERY CLAIMS PARAGON SHIPPING'S HEAD MICHAEL BODOUROGLOU
The dry bulk market is bound for a recovery in the coming weeks, as the market will be better balanced, said Mr. Michael Bodouroglou, Chairman and ...
Monday, 19 May 14
INDO COAL SWAPS FOR AVERAGE Q3' 2014 DELIVERY LOST ON WEEK AND ON MONTH
COALspot.com: Indonesian coal swaps for average Q3’ 2014 lost on week and on month according to AsiaClear OTC coal swap's reports release ...
Monday, 19 May 14
API 8 CFR SOUTH CHINA COAL LOST 2.49% MONTH ON MONTH
COALspot.com: API 8 CFR South China Coal swaps for average Q3 14 deliveries lost 2.49 percent month on month and closed at US$ 74.35 per mt as on F ...
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- Standard Chartered Bank - UAE
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Cement Manufacturers Association - India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- ASAPP Information Group - India
- Iligan Light & Power Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Pipit Mutiara Jaya. PT, Indonesia
- SMG Consultants - Indonesia
- Carbofer General Trading SA - India
- Timah Investasi Mineral - Indoneisa
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- TeaM Sual Corporation - Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- White Energy Company Limited
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Bharathi Cement Corporation - India
- Central Java Power - Indonesia
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Ministry of Transport, Egypt
- The University of Queensland
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Mines - Canada
- India Bulls Power Limited - India
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- Essar Steel Hazira Ltd - India
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Billiton Holdings Pty Ltd - Australia
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Dalmia Cement Bharat India
- Maharashtra Electricity Regulatory Commission - India
- AsiaOL BioFuels Corp., Philippines
- Barasentosa Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Africa Commodities Group - South Africa
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Agrawal Coal Company - India
- Electricity Generating Authority of Thailand
- Kepco SPC Power Corporation, Philippines
- New Zealand Coal & Carbon
- Antam Resourcindo - Indonesia
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- Globalindo Alam Lestari - Indonesia
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- CNBM International Corporation - China
- PNOC Exploration Corporation - Philippines
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Samtan Co., Ltd - South Korea
- Georgia Ports Authority, United States
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indo Tambangraya Megah - Indonesia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Commonwealth Bank - Australia
- GAC Shipping (India) Pvt Ltd
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Bulk Trading Sa - Switzerland
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- Latin American Coal - Colombia
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