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Wednesday, 27 April 16
THE OCEAN SHIPPING EXPERIENCED DRAMATIC VOLATILITY IN THE BEGINNING OF 2016 - PANOS TSILINGIRIS
 Shipping’s new (ab)normal
The global economy and ocean shipping experienced dramatic volatility in the beginning of 2016 and as the global economy undergoes structural changes, so does the derived ocean shipping activity, principally epitomized by the following abnormal trends:
(i) Constrained financing,
(ii) Deflation in asset prices, and
(iii) Shift in demand growth.
Constrained financing
First, ship financing in all of its forms is very restricted and will remain so in the years to come. There has been just one shipping IPO this year raising a mere $7m! Following the 2008 financial crisis, the excessively detailed banking legislation enacted, has forced bankers to spend more time filling out forms for regulators rather than understanding better their clients and the industry.
Despite monetary expansion, banks are not lending the excess supply of money but rather hoarding it. If you think this scarcity of financing is temporary and that the implications of Basel III have already been felt, you are simply wrong. In 2018 we also anticipate the IFRS 9 to take effect contributing to earlier recognition of credit losses, making it more expensive and difficult for banks to lend. So, via upcoming regulations, deleveraging will intensify both in the west and in emerging markets. Only the best buyers will receive money, good luck to smaller companies!
Deflation in asset prices
Second, the cost of creating new shipping assets, i.e., shipbuilding prices, are low, will get lower and will remain low for some time. Shipping deflation is due to vast manufacturing overcapacity from the previous cycle and technological change. We will experience newbuilding prices lower than the 2012 ones which at the time represented multi-year lows.
The Japanese shipbuilding prices, the premium in the sector, are correcting thanks also to the Yen now standing at 111 a dollar vs. 76 in 2012, while Chinese Builders, the floor of shipbuilding values, offer aggressive pricing assisted by the Yuan devaluations.
In S. Korea, we expect consolidation and further correction of prices following the recent elections. The abovementioned lack of financing will keep newbuilding appetite subdued for long. This will further drive prices down. And since newbuilding prices are in a sense an upper bound for second-hand prices in normal freight conditions, asset prices will stay deflated endangering the plans of opportunistic asset players.
Shift in demand growth
Third, there is a shift in growth as we transition from an industrial into a services and consumer economy. GDP growth per se, especially if anemic as it stands today, will not suffice to generate strong seaborne demand. However, with limited financing we can’t anticipate anything exciting on the physical side. The historical correlations and >1 multipliers between GDP and seaborne trade documented over several decades have been broken the last years and specifically last year seaborne trade growth was outnumbered by GDP growth. There are fears that outsourcing and globalization are reaching their limits and there are early signs of near sourcing and nationalization. Fighting pollution will remain a long-term driver, with its implications on coal, oil and regulations. Gas is coming catalyzed by shale developments!
We have indeed a new shipping abnormal -with constrained financing, assets deflation and shift in demand- and it is likely to stay with us for long. On the rosy side, the first two trends, will alleviate the two major causes of the ongoing crisis: exogenous money and excessive yard capacity.
By Panos Tsilingiris
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 reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Wednesday, 01 June 16
INDIA'S COAL IMPORTS IN APRIL 2016 DECLINED 15% Y/Y; COAL INDIA INCREASED COAL PRICES BY 6.2%
Coal India has approved raising weighted average coal prices by 6.2 per cent over the current price for both regulated and non-regulated sectors.
...
Wednesday, 01 June 16
ZERO SUPPLY TO FUEL GROWTH IN THE DRY BULK MARKET SAYS BIMCO PRESIDENT
The dry bulk market could become profitable again in 2019 – but only if a series of extremely tough and sustained measures are taken by shipo ...
Wednesday, 01 June 16
MARKET INSIGHT - LINOS KOGEVINAS
In another page from this year’s oil drama, oil has, after a series of gains, rebounded to ~$50 / barrel and immediately stopped climbing. &n ...
Tuesday, 31 May 16
CS50 INDONESIA COAL INDEX UP 0.28% COMPARED WITH A WEEK AGO
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up 0.28 percent week over week to averaging $39.01 per ton this past week, shows ...
Monday, 30 May 16
BORYEONG POWER PLANT TO IMPORT HALF A MILLION TONS OF BITUMINOUS COAL
COALspot.com: South Korea’s state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 500,000 Metric Tons of Bituminous Coal T ...
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Showing 2411 to 2415 news of total 6871 |
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- Maheswari Brothers Coal Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Meralco Power Generation, Philippines
- GVK Power & Infra Limited - India
- Siam City Cement - Thailand
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- CIMB Investment Bank - Malaysia
- Orica Australia Pty. Ltd.
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Deloitte Consulting - India
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Electricity Authority, New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Videocon Industries ltd - India
- Parliament of New Zealand
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Medco Energi Mining Internasional
- Manunggal Multi Energi - Indonesia
- Antam Resourcindo - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- PTC India Limited - India
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Grasim Industreis Ltd - India
- Jaiprakash Power Ventures ltd
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Rio Tinto Coal - Australia
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- Holcim Trading Pte Ltd - Singapore
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- IEA Clean Coal Centre - UK
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Riau Bara Harum - Indonesia
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Semirara Mining and Power Corporation, Philippines
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- VISA Power Limited - India
- SN Aboitiz Power Inc, Philippines
- New Zealand Coal & Carbon
- Ministry of Mines - Canada
- OPG Power Generation Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Karbindo Abesyapradhi - Indoneisa
- Interocean Group of Companies - India
- Goldman Sachs - Singapore
- The University of Queensland
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Ambuja Cements Ltd - India
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- SMG Consultants - Indonesia
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Barasentosa Lestari - Indonesia
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- The State Trading Corporation of India Ltd
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Thiess Contractors Indonesia
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Renaissance Capital - South Africa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Orica Mining Services - Indonesia
- White Energy Company Limited
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- GMR Energy Limited - India
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
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