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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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Thursday, 13 November 14
MODERN DRY BULK SHIPS' PRICES START FIRMING UP - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
While the main story of the past few weeks has been the rebound of the dry bulk market, which has been a result of increased Chinese iron ore impor ...
Wednesday, 12 November 14
PANAMAX: WITNESSED A FAIRLY STABLE MARKET IN THE ATLANTIC
COALspot.com: Despite the fact that the Dry Bulk market noted another weekly increase, clouds of uncertainty returned mid-week onwards, as the mini ...
Wednesday, 12 November 14
SHIPPING MARKET INSIGHT - CHRISTOPHER T. WHITTY
COALspot.com: The fight continues between the low-cost iron ore producers and the big three: Vale, Rio Tinto and BHP Billiton. We are moving into a ...
Tuesday, 11 November 14
FACING CHALLENGES AND MEETING OPPORTUNITIES - INTERNATIONAL EPC CONFERENCE & EXHIBITION
Press Release: SKYCONNECTION and TRANSEVENT, which is fully supported by the Institution of Engineers Indonesia and Ministry of Industry of the Rep ...
Tuesday, 11 November 14
NEWCASTLE COAL SWAP CLOSED AT $ 52.65 FOR Q1' 15 DELIVERY
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery decreased US$ 2.83 (-5.10%) month over month and US$ 1.35 (-2.50%) week ove ...
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- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Australian Commodity Traders Exchange
- Latin American Coal - Colombia
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- PTC India Limited - India
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Globalindo Alam Lestari - Indonesia
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Binh Thuan Hamico - Vietnam
- Karaikal Port Pvt Ltd - India
- Makarim & Taira - Indonesia
- Indika Energy - Indonesia
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Sarangani Energy Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- ICICI Bank Limited - India
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Singapore Mercantile Exchange
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Energy Link Ltd, New Zealand
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Malabar Cements Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Kumho Petrochemical, South Korea
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Medco Energi Mining Internasional
- Eastern Coal Council - USA
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Indonesian Coal Mining Association
- Kobexindo Tractors - Indoneisa
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- South Luzon Thermal Energy Corporation
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kideco Jaya Agung - Indonesia
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Star Paper Mills Limited - India
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Trasteel International SA, Italy
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- Videocon Industries ltd - India
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Australian Coal Association
- Indian Energy Exchange, India
- Leighton Contractors Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Global Green Power PLC Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Vizag Seaport Private Limited - India
- Borneo Indobara - Indonesia
- The University of Queensland
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- Bhoruka Overseas - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Sakthi Sugars Limited - India
- Jindal Steel & Power Ltd - India
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