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Wednesday, 22 October 14
MARKET INSIGHT - THEODORE NTALAKOS, INTERMODAL
 ECO designs - revisited
The ECO vessels are already here but the oil and bunker prices are plummeting to their cheapest level since 2010. Is this development coming as verification to the ship-owners that have been dismissive of the benefits of the new designs? Moreover, are we experiencing the two tier market that was discussed a few years ago?
On the sale & purchase front, the answer is clearly a yes... and a no... Although there is nothing new about the preference towards Japanese vessels from both charterers and buyers as they were always a different tier from Chinese, there is a substantial price gap of about twenty percent between the modern Chinese vessels and the ones built based on new designs with electronic engines, optimized hulls, energy efficiency devices etc.
Further- more, good quality new Chinese ships maintain their values not far from their Japanese piers. We recently compared the consumption of two kamsarmax vessels, one was built in Japan in 2007 and one in China in 2013 equipped with electronic engine and fuel efficient propeller (no optimized hull form). The fuel efficiency of the two vessels was very similar. So the new ECO vessels and all the new technologies used on them are already taking their market share, the charterers' preference and one can safely say that are here to stay. With the oil price plummeting however, it's also easy to make the opposite argument. I distinctly remember a discussion I had with a well-known Taiwanese ship-owner during a forum; I was (I still am) defending the new ECO designs and was repeating to him “The oil price will only go up!” to which he replied with his experience from the crises of the previous decades saying “I fully agree with you (and all the energy reports on the planet for that matter) . . . but what if it doesn’t?”
Cheaper bunkers clearly favor the owners that bought discounted Chinese ships that few people would consider, mainly because of their higher fuel consumption. The desired rate of return on an investment can come either from the higher earnings of a highly efficient ECO vessel, but also from the lower initial investment on a less fuel efficient vessel. Fact is that the fuel efficiency benefit disappears as bunker prices drop. It also seems that this trend will probably continue at least in the short term as according to data from the International Energy Agency, the forecast of global oil demand for 2014 has been revised at lower levels since last month on reduced expectations of economic growth and the weak recent trend. Annual demand growth is now projected to drop in Q1 & Q2 2015 and rise again in Q3 of 2015, as the macroeconomic backdrop improves.
On the other hand, while new sources of oil supply have driven the oil price to its current lows, not seen for almost half a decade, demand for oil has actually been on the rise and as more oil is being produced and consumed now than in 2011 it will be interesting to see how the oil price - and the bunker prices - will develop in the future. The truth is that irrespective of bunker prices, a more efficient vessel will always be more competitive and there is no doubt that there are other considerations when evaluating a new shipping investment, such as EEDI and emissions' control imposed by the regulatory bodies that only new ships can address. And although complying with these regulations may not have a positive effect in the pockets of ship-owners like the reduced fuel consumption does, for a forward looking owner the new designs and the new technologies should be the main part of their strategy. Emission control is also here to stay and the industry must adapt to the new requirements.
By Theodore Ntalakos
Chartering (Wet: Firm+ / Dry: Stable+ )
With the exception of Panamaxes, the rest of the Dry Bulk market was still struggling for the bigger part of last week, while towards Friday things improved as Capesize rates finally started moving up. The BDI closed today (21/10/2014) at 1,090 points, up by 117 points compared to Monday’s levels (20/10/2014) and an increase of 142 points compared to previous Tuesday’s closing (14/10/2014).
In the crude carriers market rates benefitted further from softening bunker prices, while sentiment is very positive for the upcoming winter season. The BDTI Monday (20/10/2014) was at 702 points, an increase of 19 points and the BCTI at 600, an increase of 26 points compared to previous Mon- day’s (13/10/2014)levels.
Compiled by:
Intermodal Research & Valuations
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.
Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Friday, 14 November 14
U.S. WEEKLY COAL OUTPUT SLIPS SLIGHTLY WEEK ENDING NOVEMBER 08
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.9 million short tons (mmst) of coal ...
Friday, 14 November 14
MORE NATURAL GAS FROM RUSSIA TO HELP STABILISE CHINA PRICES - FITCH RATINGS
COALspot.com: Fitch Ratings has said possible additional natural gas supplies from Russia's OAO Gazprom to China via the Altai pipeline would h ...
Thursday, 13 November 14
SLOWER AND LOWER HAS BEEN THE TREND OF THE PANAMAX IN BOTH HEMISPHERES - FEARNLEYS
Handy
We are experiencing an oversupply of tonnage in the Atlantic which is out numbering the amount of cargoes, Fearnleys broker says in its lat ...
Thursday, 13 November 14
DRY BULK MARKET'S REBOUND HINGES ON IRON ORE OVERSUPPLY ISSUES MOVING FORWARD - HELLENIC SHIPPING NEWS
“One man’s benefit, is another man’s demise” is a phrase which can be used to describe today’s situation in the dry b ...
Thursday, 13 November 14
COAL MINISTER WANTS INDIA TO STOP COAL IMPORTS IN TWO OR THREE YEARS
COALspot.com: India to ramp up coal production to a billion tonnes by 2019 from its current level of 490 million tones. According to Power and Coal ...
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- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Thai Mozambique Logistica
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Star Paper Mills Limited - India
- Sindya Power Generating Company Private Ltd
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Therma Luzon, Inc, Philippines
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Marubeni Corporation - India
- Edison Trading Spa - Italy
- Indian Energy Exchange, India
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Essar Steel Hazira Ltd - India
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Heidelberg Cement - Germany
- SMG Consultants - Indonesia
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Merrill Lynch Commodities Europe
- Indika Energy - Indonesia
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- Electricity Generating Authority of Thailand
- Bhushan Steel Limited - India
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Medco Energi Mining Internasional
- Larsen & Toubro Limited - India
- Sree Jayajothi Cements Limited - India
- Baramulti Group, Indonesia
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- San Jose City I Power Corp, Philippines
- Minerals Council of Australia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Bhoruka Overseas - Indonesia
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- Intertek Mineral Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Miang Besar Coal Terminal - Indonesia
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Wood Mackenzie - Singapore
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Directorate Of Revenue Intelligence - India
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- The University of Queensland
- Cement Manufacturers Association - India
- Bangladesh Power Developement Board
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Riau Bara Harum - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- Mercuria Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Bhatia International Limited - India
- Planning Commission, India
- Karbindo Abesyapradhi - Indoneisa
- Karaikal Port Pvt Ltd - India
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- Barasentosa Lestari - Indonesia
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- CNBM International Corporation - China
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Port Waratah Coal Services - Australia
- Xindia Steels Limited - India
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Semirara Mining and Power Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Manunggal Multi Energi - Indonesia
- Coalindo Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- GMR Energy Limited - India
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Bukit Makmur.PT - Indonesia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Price Waterhouse Coopers - Russia
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