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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, 23 March 16
THE PANAMA CANAL - WILL THE MELTING OF POLAR ICE CAPS CREATE RIVAL NAVIGATIONAL WATERWAYS THROUGH THE ARCTIC? - INTERMODAL
The Panama Canal, 102 years after its initial opening, is now about to have its expansion completed with a cost of USD5.25 Billion. It is a project ...
Tuesday, 22 March 16
FOUR NEW MARKET MEMBERS HAVE JOINED GLOBALCOAL
globalCOAL® announced yesterday that four new Market Members have joined its international trading community.
Ferrocadia DMCC is an intern ...
Monday, 21 March 16
INDONESIAN 4200 GAR COAL INDEX ROSE $0.12 OR, 0.44% WEEK OVER WEEK; INDEX CLOASED AT $27.19 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.21 percent week over week to averaging $38.90 per ton on this past Friday, ac ...
Monday, 21 March 16
THE BALTIC DRY INDEX ROSE SLIGHTLY WEEK OVER WEEK; BCI UP 11.93%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued rose this week helped by higher rates for Cape ...
Friday, 18 March 16
OUTLOOK ON GLOBAL SHIPPING SECTOR TURNS NEGATIVE AS SUPPLY-DEMAND GAP WIDENS AND EBITDA DECLINES - MOODY'S
Moody’s Investors Service (Moody’s) has changed its outlook on the global shipping sector to negative as it expects supply growth to ou ...
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Showing 2511 to 2515 news of total 6871 |
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- Kapuas Tunggal Persada - Indonesia
- Indian Energy Exchange, India
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Central Electricity Authority - India
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Agrawal Coal Company - India
- Aditya Birla Group - India
- GMR Energy Limited - India
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Metalloyd Limited - United Kingdom
- Georgia Ports Authority, United States
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Ministry of Finance - Indonesia
- Romanian Commodities Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Kideco Jaya Agung - Indonesia
- SMG Consultants - Indonesia
- Attock Cement Pakistan Limited
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- Parry Sugars Refinery, India
- Australian Coal Association
- Indonesian Coal Mining Association
- Gujarat Mineral Development Corp Ltd - India
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Bhoruka Overseas - Indonesia
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Mintek Dendrill Indonesia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- MS Steel International - UAE
- Planning Commission, India
- Deloitte Consulting - India
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Tamil Nadu electricity Board
- India Bulls Power Limited - India
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- AsiaOL BioFuels Corp., Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Wood Mackenzie - Singapore
- Neyveli Lignite Corporation Ltd, - India
- Holcim Trading Pte Ltd - Singapore
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Sakthi Sugars Limited - India
- Straits Asia Resources Limited - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- Minerals Council of Australia
- Energy Link Ltd, New Zealand
- Intertek Mineral Services - Indonesia
- Goldman Sachs - Singapore
- The University of Queensland
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- Mercator Lines Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Singapore Mercantile Exchange
- Rashtriya Ispat Nigam Limited - India
- VISA Power Limited - India
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Banpu Public Company Limited - Thailand
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Essar Steel Hazira Ltd - India
- Mjunction Services Limited - India
- Kalimantan Lumbung Energi - Indonesia
- PTC India Limited - India
- South Luzon Thermal Energy Corporation
- Alfred C Toepfer International GmbH - Germany
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Xindia Steels Limited - India
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- ICICI Bank Limited - India
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Baramulti Group, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Vedanta Resources Plc - India
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- McConnell Dowell - Australia
- Kaltim Prima Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Karbindo Abesyapradhi - Indoneisa
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- PowerSource Philippines DevCo
- Tata Chemicals Ltd - India
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Iligan Light & Power Inc, Philippines
- Makarim & Taira - Indonesia
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
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