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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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Monday, 27 October 14
CFR SOUTH CHINA COAL SWAPS PERFORMED POSITIVE THIS PAST WEEK
COALspot.com: API 8 CFR South China Coal swap for Q4’ 2014 delivery decreased US$ 1.68 (-2.55%) month over month and increased US$ 0.87 (+1.3 ...
Sunday, 26 October 14
CAPE'S STRONG PERFORMANCE PUSHES BDI INDEX UPWARDS
COALspot.com: The BDI was up by 26.27 pct and closed at 1192 points week and week. The Cape size performance has pushed up BDI and Cape size index ...
Friday, 24 October 14
WEEKLY U.S COAL PRODUCTION DOWN 2.7% FOR THE WEEK ENDING OCTOBER 18
COALspot.com – United States the world's one of largest coal producers, produced approximately 18.7 million short tons (mmst) of coal in ...
Thursday, 23 October 14
THE BEARS, HOWEVER, STILL CRY; FOR HOW LONG WILL IT LAST? - FEARNLEYS
Handy
"We experience a typical oversupply of ships in the Atlantic which causing rates to slide. In the USG it is just enough cargoes to kee ...
Wednesday, 22 October 14
CAPESIZE MARKET REMAINED UNDER PRESSURE
COALspot.com: The Dry Bulk market closed on the red for yet another week although following Friday sentiment has started to improve on the back of ...
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- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Australian Commodity Traders Exchange
- Energy Link Ltd, New Zealand
- Tata Chemicals Ltd - India
- PowerSource Philippines DevCo
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Mjunction Services Limited - India
- The University of Queensland
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Grasim Industreis Ltd - India
- Coal and Oil Company - UAE
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Goldman Sachs - Singapore
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Planning Commission, India
- Petrochimia International Co. Ltd.- Taiwan
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Pendopo Energi Batubara - Indonesia
- International Coal Ventures Pvt Ltd - India
- Aditya Birla Group - India
- Indika Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Economic Council, Georgia
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Rio Tinto Coal - Australia
- Star Paper Mills Limited - India
- White Energy Company Limited
- Binh Thuan Hamico - Vietnam
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Baramulti Group, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Toyota Tsusho Corporation, Japan
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Metalloyd Limited - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Savvy Resources Ltd - HongKong
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Coastal Gujarat Power Limited - India
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- New Zealand Coal & Carbon
- Essar Steel Hazira Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bayan Resources Tbk. - Indonesia
- Jaiprakash Power Ventures ltd
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Agrawal Coal Company - India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- Sarangani Energy Corporation, Philippines
- Heidelberg Cement - Germany
- ASAPP Information Group - India
- Bulk Trading Sa - Switzerland
- Wilmar Investment Holdings
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- SMC Global Power, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement - Thailand
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- VISA Power Limited - India
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Globalindo Alam Lestari - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- Kumho Petrochemical, South Korea
- Uttam Galva Steels Limited - India
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- Lanco Infratech Ltd - India
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Ind-Barath Power Infra Limited - India
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Maheswari Brothers Coal Limited - India
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Latin American Coal - Colombia
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