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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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Friday, 29 April 16
U.S. COAL IMPORTS IN Q4' 15 DECLINED TO 2.7 MMST FROM 3 MMST IN Q3' 15
COALspot.com – U.S the world’s second largest coal producer has produced approximately totaled an estimated 10.3 million short tons (mm ...
Thursday, 28 April 16
PRICES OF POWER-STATION COAL IN INDONESIA IS INCREASING
COALspot.com: Inquiries for Indonesian 4200 - 4400 Kcal/kg GAR thermal coal cargoes from India suddenly increase recent days.
A Jakarta-based ...
Thursday, 28 April 16
KOMIPO TO IMPORT 710K MT OF BITUMINOUS COAL DURING JULY - SEPTEMBER 2016
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 710,000 Metric Tons of Bituminous Coal for its B ...
Thursday, 28 April 16
CAPE: BIT MORE OPTIMISM IN THE MARKET; SUPRAMAX: FORWARD CURVE IS FALLING - FEARNLEYS
Cape
A bit of a slower week. Activity level has dropped, though the rates do still remain firm, says Fearnleys in its latest weekly report.
...
Wednesday, 27 April 16
INDONESIAN COAL MINER KIDECO REPORTED NET PROFIT OF US$138.1 MILLION IN 2015
COALspot.com: Kideco Jaya Agung, one of the Indonesia's leading coal miners has reported net profit of US$138.1 million on revenue of US$1.65 b ...
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- GAC Shipping (India) Pvt Ltd
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- GVK Power & Infra Limited - India
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Africa Commodities Group - South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wilmar Investment Holdings
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Gujarat Mineral Development Corp Ltd - India
- Sakthi Sugars Limited - India
- Bharathi Cement Corporation - India
- Sojitz Corporation - Japan
- Jaiprakash Power Ventures ltd
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Indian Energy Exchange, India
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Meralco Power Generation, Philippines
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Authority, New Zealand
- Oldendorff Carriers - Singapore
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Borneo Indobara - Indonesia
- Xindia Steels Limited - India
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- TeaM Sual Corporation - Philippines
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Baramulti Group, Indonesia
- Bayan Resources Tbk. - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- ASAPP Information Group - India
- Thiess Contractors Indonesia
- Mercuria Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ambuja Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Aboitiz Power Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Essar Steel Hazira Ltd - India
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Ceylon Electricity Board - Sri Lanka
- Sinarmas Energy and Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Savvy Resources Ltd - HongKong
- MS Steel International - UAE
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- Attock Cement Pakistan Limited
- PTC India Limited - India
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- European Bulk Services B.V. - Netherlands
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Wood Mackenzie - Singapore
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Eastern Energy - Thailand
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- Trasteel International SA, Italy
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Marubeni Corporation - India
- Standard Chartered Bank - UAE
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Posco Energy - South Korea
- Tata Chemicals Ltd - India
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