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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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Monday, 12 January 15
SHIPPING - CHALLENGES AND RESOLUTIONS - EVA TZIMA
Last year has without a doubt been another challenging one both for both our industry and our country. As Greece is currently dominated by election ...
Sunday, 11 January 15
BDI DECLINED 8% ON WEEK; BCI LOST 31%
COALspot.com: The BDI continued its decline in the first week of this year or lost 8 pct week over week. The BDI was closed at 709 points whi ...
Friday, 09 January 15
U.S. EASTERN SPOT STEAM COAL PRICES FELL IN 2014; ROSE IN WEST - EIA
U.S. Eastern spot steam coal prices declined in 2014 compared to 2013 levels because of a decline in steam coal exports.
According to U.S. Ene ...
Friday, 09 January 15
WEEKLY U.S. COAL PRODUCTION UP AN ESTIMATED 2.2% Y-O-Y
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
Thursday, 08 January 15
INDONESIA PRESSES ON WITH HIGHER COAL ROYALTY FEE TO BOOST STATE REVENUE - JG
The Indonesian government is pressing on with its plan to raise the royalty charged to coal miners in order to increase state revenue, but the move ...
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- Meralco Power Generation, Philippines
- Bayan Resources Tbk. - Indonesia
- Semirara Mining Corp, Philippines
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- San Jose City I Power Corp, Philippines
- Simpson Spence & Young - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Planning Commission, India
- Minerals Council of Australia
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- Grasim Industreis Ltd - India
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- Ministry of Finance - Indonesia
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- Vizag Seaport Private Limited - India
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Therma Luzon, Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Cigading International Bulk Terminal - Indonesia
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- TeaM Sual Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Sree Jayajothi Cements Limited - India
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Energy Development Corp, Philippines
- The University of Queensland
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- VISA Power Limited - India
- Thai Mozambique Logistica
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Banpu Public Company Limited - Thailand
- Semirara Mining and Power Corporation, Philippines
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- Kalimantan Lumbung Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Baramulti Group, Indonesia
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wood Mackenzie - Singapore
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Electricity Authority, New Zealand
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- PTC India Limited - India
- Ind-Barath Power Infra Limited - India
- GAC Shipping (India) Pvt Ltd
- South Luzon Thermal Energy Corporation
- Bharathi Cement Corporation - India
- Agrawal Coal Company - India
- Chettinad Cement Corporation Ltd - India
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Orica Australia Pty. Ltd.
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Parliament of New Zealand
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Australian Coal Association
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Intertek Mineral Services - Indonesia
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Videocon Industries ltd - India
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Indian Energy Exchange, India
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Kideco Jaya Agung - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Deloitte Consulting - India
- Africa Commodities Group - South Africa
- Australian Commodity Traders Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- MS Steel International - UAE
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
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