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