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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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- Aditya Birla Group - India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- The University of Queensland
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- TeaM Sual Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rashtriya Ispat Nigam Limited - India
- Economic Council, Georgia
- Bhatia International Limited - India
- Trasteel International SA, Italy
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Therma Luzon, Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Agrawal Coal Company - India
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Siam City Cement - Thailand
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Posco Energy - South Korea
- Leighton Contractors Pty Ltd - Australia
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Dalmia Cement Bharat India
- PTC India Limited - India
- MS Steel International - UAE
- The State Trading Corporation of India Ltd
- Pendopo Energi Batubara - Indonesia
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GMR Energy Limited - India
- Iligan Light & Power Inc, Philippines
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Salva Resources Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Port Waratah Coal Services - Australia
- Globalindo Alam Lestari - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- VISA Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Mines - Canada
- Simpson Spence & Young - Indonesia
- Vedanta Resources Plc - India
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Asmin Koalindo Tuhup - Indonesia
- New Zealand Coal & Carbon
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- Videocon Industries ltd - India
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- GAC Shipping (India) Pvt Ltd
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- Samtan Co., Ltd - South Korea
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Interocean Group of Companies - India
- Planning Commission, India
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