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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.
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Sunday, 09 November 14
CAPE INDEX UP 3.06%; PANAMAX INDEX FELL 4.05%
COALspot.com: The BDI was almost at same levels compared to last week closing or just increased 0.77 pct from last week. The BDI was closed at 1437 ...
Friday, 07 November 14
U.S. PRODUCED 85.60 MILLION SHORT TONS OF COAL IN OCTOBER, UP 2.88% M-O-M
COALspot.com – United States the world's one of the largest coal producers, produced approximately 19.0 million short tons (mmst) of coal ...
Thursday, 06 November 14
THE ATLANTIC HAS REMAINED STRONG WITH A HEALTHY SUPPLY OF NEW CARGOES
Handy
This week has continued its slow trend in both hemispheres and even though rates are a bit up w-o-w it is not a clear sign for any improvem ...
Wednesday, 05 November 14
CAPESIZE SEGMENT ENJOYED FIRMING RATES ACROSS BOTH BASINS
Following a fantastic week in terms of rate performance for Capes, the Dry Bulk market managed to note another positive weekly closing, which stron ...
Wednesday, 05 November 14
SHIPPING MARKET INSIGHT - PANOS TSILINGIRIS
COALspot.com: The steep appreciation in dry bulker values between late 2012 and March 2014 resulted in unrealistically expensive ship values compar ...
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- Cigading International Bulk Terminal - Indonesia
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Salva Resources Pvt Ltd - India
- Makarim & Taira - Indonesia
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Bulk Trading Sa - Switzerland
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Antam Resourcindo - Indonesia
- Dalmia Cement Bharat India
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Singapore Mercantile Exchange
- ICICI Bank Limited - India
- Bhatia International Limited - India
- McConnell Dowell - Australia
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- MS Steel International - UAE
- Central Java Power - Indonesia
- Banpu Public Company Limited - Thailand
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- India Bulls Power Limited - India
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Riau Bara Harum - Indonesia
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Trasteel International SA, Italy
- Formosa Plastics Group - Taiwan
- Gujarat Sidhee Cement - India
- Heidelberg Cement - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Latin American Coal - Colombia
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Parry Sugars Refinery, India
- European Bulk Services B.V. - Netherlands
- IHS Mccloskey Coal Group - USA
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Meralco Power Generation, Philippines
- Barasentosa Lestari - Indonesia
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Port Waratah Coal Services - Australia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Australian Coal Association
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Chettinad Cement Corporation Ltd - India
- Directorate Of Revenue Intelligence - India
- Miang Besar Coal Terminal - Indonesia
- Grasim Industreis Ltd - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Chamber of Mines of South Africa
- Xindia Steels Limited - India
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coalindo Energy - Indonesia
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Anglo American - United Kingdom
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- Marubeni Corporation - India
- White Energy Company Limited
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- LBH Netherlands Bv - Netherlands
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Eastern Coal Council - USA
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Leighton Contractors Pty Ltd - Australia
- Carbofer General Trading SA - India
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Planning Commission, India
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Sakthi Sugars Limited - India
- Essar Steel Hazira Ltd - India
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