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Wednesday, 03 August 16
SHIPPING MARKET INSIGHT - EVA TZIMA
 The Good…
Demand. Amidst all the unprecedented geopolitical turmoil and shifts in the likes of Brexit, the IMF lowered last month its global growth expectations but as far as growth in emerging market and developing economies is concerned, expectations were unaffected. 2016 is still expected to be the first year since 2010 that growth in these countries will pick up and this is great news for the dry bulk market, as these economies, accounting for more than 70% of global growth, are also the main drivers of dry bulk shipping.
The Bad…
Supply. A lot of hopes have been generated from scrapping activity in bigger sizes this year but the truth is that we still have a long way to go before tonnage supply gets down to a level that it can meaningfully support earnings. Let’s look at some figures in the >120,000dwt range. These vessels accounted for 295.07m dwt in January, while today, despite all the intense scrapping we are only down to 294.87m., which means that cancellations and slippage made little difference once some of the scheduled deliveries kicked in. Adding to that the 12.00m dwt that have been ordered since January (30 Valemaxes) against the 11.94m dwt that have been scrapped during the same period and the answer to the “Are we there yet?” question becomes not just a simple “Not yet.” but rather a big fat “Not even close”.
And the Ugly.
Overlapping. Ultramaxes, Kamsarmaxes, Post-Panamaxes.
Can we create a new size called Evamax please?
Was the dry bulk trade actually in need of these sizes or has the market been getting ahead of itself since the last shipping boom? Fact; as designs evolve, ships change in both their efficiency and size. But then again shouldn’t the latter be a long-term process during which the fleet of the older size gets to substantially decrease? And much more importantly a process during which actual demand and consequently charterers and traders dictate parcel size needs much more than shipbuilders? It is no wonder that the poor old Panamax has been squeezed from both below (Ultramaxes) and above (Kamsarmaxes) in the dwt range, while the modern Post-Panamax fleet has been also striving to survive, simultaneously chocking those already battered Capesize margins.
“Buy now”, “Buy later”, “The best trade is no trade”.
Different strategies, different risks, different hopes. Someone who buys today a “cheap” vessel could potentially make money from a recovery in asset prices down the line. But is just “cheap” the goal? Let’s assume that the long awaited recovery in the Dry Bulk market delays much further. That instead of a more clearly shaped “up we go” in the period leading to the eventual recovery we get a lot of mini cycles, during which the bottom is around OPEX and the ceiling not too way above. The current crisis in the dry bulk sector – as every crisis does - will undoubtedly generate a new cluster of prosperous shipowners. Whether in this specific crisis these will be the ones betting on a meaningful asset play in the next couple of years (achieved with bigger, more expensive sizes) or the ones investing in vessels that can find employment much easier during market downturns, is probably the question at hand. Investing in a size that can cover more commodities, more ports, has fewer operating expenses and let’s face it is not as easily “controlled” by bigger players, allows owners to not just bet on the asset’s appreciation – a rather risky bet if it takes much longer for the market to recover – but also operate their ships in a less challenging/volatile environment. After all, even though history does repeat itself during market cycles, the fundamentals during the times it does usually differ vastly.
By Eva Tzima
Research Analyst
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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Tuesday, 28 June 16
WEEKLY CS COAL INDICES ROSE ON RENEWED DEMAND FROM CHINA
COALspot.com: Average 5000 GAR coal index of Indonesian origin was up by 0.66 percent week over week to averaging $39.65 per ton this past week, sh ...
Tuesday, 28 June 16
CHINA'S IRON ORE IMPORTS: HOW MUCH MORE WORK FOR CAPES? - CLARKSONS
Chinese iron ore imports account for around two thirds of global seaborne iron ore shipments, making it the key driver of Capesize employment. Whil ...
Monday, 27 June 16
LATEST NEWS ON BIMCO'S CONTRACTS AND CLAUSES
BIMCO is currently updating several of its most widely used charter parties including SUPPLYTIME and BARECON. New developments include the Standard ...
Monday, 27 June 16
BREXIT RESULT COULD SEE UK FACING AN EXODUS OF MARITIME TALENT - FASTSTREAM
The UK’s decision to leave the EU has the potential to drive many of its maritime employees away, according to the results of a survey issued ...
Monday, 27 June 16
THE BDI UP 3.75 PERCENT ; BCI FELL 1.51% WEEK OVER WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose this past week. The BDI was up 3.75 percent from las ...
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- Bharathi Cement Corporation - India
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- Indian Energy Exchange, India
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Baramulti Group, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- Central Java Power - Indonesia
- Riau Bara Harum - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Sical Logistics Limited - India
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Essar Steel Hazira Ltd - India
- Carbofer General Trading SA - India
- SMC Global Power, Philippines
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Ambuja Cements Ltd - India
- Parliament of New Zealand
- Lanco Infratech Ltd - India
- OPG Power Generation Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- ICICI Bank Limited - India
- GMR Energy Limited - India
- IEA Clean Coal Centre - UK
- Wilmar Investment Holdings
- Kobexindo Tractors - Indoneisa
- Manunggal Multi Energi - Indonesia
- Star Paper Mills Limited - India
- Pendopo Energi Batubara - Indonesia
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Chamber of Mines of South Africa
- Dalmia Cement Bharat India
- Aditya Birla Group - India
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Planning Commission, India
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Petron Corporation, Philippines
- Siam City Cement - Thailand
- ASAPP Information Group - India
- Petrochimia International Co. Ltd.- Taiwan
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- Orica Mining Services - Indonesia
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Karaikal Port Pvt Ltd - India
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- Jindal Steel & Power Ltd - India
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Latin American Coal - Colombia
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Gujarat Mineral Development Corp Ltd - India
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Ministry of Finance - Indonesia
- The University of Queensland
- Australian Coal Association
- Toyota Tsusho Corporation, Japan
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Xindia Steels Limited - India
- Vedanta Resources Plc - India
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Ind-Barath Power Infra Limited - India
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- Trasteel International SA, Italy
- Price Waterhouse Coopers - Russia
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Vijayanagar Sugar Pvt Ltd - India
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Madhucon Powers Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Standard Chartered Bank - UAE
- Parry Sugars Refinery, India
- PTC India Limited - India
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Edison Trading Spa - Italy
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Wood Mackenzie - Singapore
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mintek Dendrill Indonesia
- Tamil Nadu electricity Board
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Samtan Co., Ltd - South Korea
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