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Wednesday, 24 December 14
MARKET INSIGHT - JOHN N. COTZIAS, INTERMODAL SNP BROKER
 The year is coming to an end, and we should be able to assess if this was a good year, a bad year, or even a lousy one? The answer clearly depends on where you stand… which was your bet-horse in other words.
The negative sentiment that has been prevailing in the dry bulk market lately leaves most owners with a rather bitter taste following the free fall of the past weeks. Enquiry levels remain low and we observe with great concern the everyday softening that takes place in the Capesize segment, with the BCI touching new historical lows daily, since its introduction in March 1999. In the past four weeks we have seen the index dropping from above 3,000 points to well below 500 points, while the average T/C for the segment has moved from $23,000/day to below $4,900/day. What a drop! If one considers that most Capes run their OPEX in excess of $10k/day and the level of CAPEX for those Capes acquired at 100mil USD then it goes without saying that some owners and their banks are facing hard times ahead. The drop in second-hand prices is also evident, with prices approaching the levels we witnessed back in December 2012 and January 2013, while every new deal is marking a lower last done, which is also the benchmark for the negotiation of the next sale candidate.
It was this time two years ago, in our brokers insight once more just before the Xmas holidays that we mentioned that we are facing low ship values that pose a great opportunity for anyone proceeding with purchases to possibly achieve an asset play. Buy low sell higher! And yes that was the case. Definitely we were no prophets, nor in a possession of a crystal bowl. It was just a clear observation of market fundamentals, and the shipping business cycles that always bring these spikes and enable investors to better ride the waves of the cycle.
So what are the fundamentals now? Bunker prices are at a 5 year low, the Japanese Yen reached a seven year low against the US Dollar, the Euro to the Dollar may be soon approaching 1.15 according to some, the Russian economy presently looks Rubbled... sorry meant troubled, iron ore prices are phenomenally low, China’s softening appetite in November has been weighing down on Capes and mineral export bans from Indonesia hurt further the Pacific trade. At the same time the scrap price offered in China is at $220-$230/ton and price levels have also been dropping sharply in the Indian Subcontinent. Most notably, the overall scrap activity for 2014 is 30% less than that of last year, while newbuilding ordering in 2014 is almost 50% down compared to 2013 levels.
A very simplistic approach says that during a bad market when freight rates suffer, the normal is that ship prices correct. Definitely some owners lose their sleep during this period, however others are seeing this as a golden opportunity to buy low, support their investment until rates improve and once their asset gains in value, lock in the profits. Bankers always say that a business proposal should be viable with all figures “adding-up” positively… however these proposals never take into account the value of asset play. A business deal in which you are buying low, is usually one taking place in a freight environment which doesn’t make sense for a banker to invest in, but is usually the one that will most probably offer the opportunity to asset play.
Fasten your seatbelt, the cycle ahead might be bumpy. My best and warmest wishes to all of you and all friends and colleagues that have been showing their continual support throughout the years.
” Kali Chronia” as we say in Greece!
By ohn N. Cotzias, Intermodal SnP Broker
Compiled by:
Intermodal Research & Valuations
Analysts:
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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Sunday, 15 February 15
BALTIC DRY INDEX CONTINUALLY DIPPED IN RED
COALspot.com: The Baltic Dry Index continues its decline and fell 5.18 pct to 530 points week on week due to falling commodity prices and declining ...
Saturday, 14 February 15
SHALE GAS AND TIGHT OIL ARE COMMERCIALLY PRODUCED IN JUST FOUR COUNTRIES - EIA
KNOWLEDGE TO ELEVATE
The United States, Canada, China, and Argentina are currently the only four countries in the world that are producing com ...
Friday, 13 February 15
U.S. WEEKLY COAL PRODUCTION SHOWS 10% DECLINE
COALspot.com – United States the world's one of the largest coal producers, produced approximately 18.1 million short tons (mmst) of coal ...
Friday, 13 February 15
SMALL AND MEDIUM-SIZED SHIP OWNERS SQUEEZED OUT OF THE MARKET ON CRASHING DRY BULK MARKET AND EUROZONE CRISIS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Financing issues have started to tighten the noose in the throats of small and medium-size ship owners, who were already facing problems over the p ...
Thursday, 12 February 15
CAPESIZE: THE BEST DESCRIPTION FOR THE MARKET IS, FLAT - FEARNRESEARCH
Handy
The handy and supra market is also being affected by the marginal volume of activity in the commodity sales. We see a small upturn in the T ...
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- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Timah Investasi Mineral - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Bayan Resources Tbk. - Indonesia
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Bhatia International Limited - India
- Standard Chartered Bank - UAE
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Toyota Tsusho Corporation, Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- PetroVietnam Power Coal Import and Supply Company
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Cement Manufacturers Association - India
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Georgia Ports Authority, United States
- Billiton Holdings Pty Ltd - Australia
- Indogreen Group - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Binh Thuan Hamico - Vietnam
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Thiess Contractors Indonesia
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Offshore Bulk Terminal Pte Ltd, Singapore
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Minerals Council of Australia
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Antam Resourcindo - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Mercuria Energy - Indonesia
- Parliament of New Zealand
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- Jorong Barutama Greston.PT - Indonesia
- MS Steel International - UAE
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Interocean Group of Companies - India
- GMR Energy Limited - India
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Mjunction Services Limited - India
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- Alfred C Toepfer International GmbH - Germany
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Straits Asia Resources Limited - Singapore
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Indika Energy - Indonesia
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Tamil Nadu electricity Board
- Attock Cement Pakistan Limited
- Planning Commission, India
- Goldman Sachs - Singapore
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Trasteel International SA, Italy
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- CNBM International Corporation - China
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Bukit Baiduri Energy - Indonesia
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- Essar Steel Hazira Ltd - India
- Power Finance Corporation Ltd., India
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Electricity Authority, New Zealand
- Orica Australia Pty. Ltd.
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- White Energy Company Limited
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
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