Vallar Share Discussion Threads

[jon827] 10/1/2011 17:54

35 Miles Of Capesize Vessels Leaving Shipyards In 2011 Guarantee Low Baltic Dry For A Long Time

Back in 2007 and 2008 every single dry shipping company had put in future delivery orders for everything from Panamax to Capesize vessels, at even the most shoddy of Chinese shipyards. Now, a few years later, as these orders are starting to be completed, the world's dry bulk shipping industry is suddenly experiencing an unprecedented supply glut of coal/ore carriers, which has resulted in the Baltic Dry index droppoing below 1,500 for the first time since 2009. And as Bloomberg reports, with at least 200 capesize ships, stretching at 35 miles end to end, expected to be completed by the world's shipyards, which represents an 18% expansion in the world's shipping fleet, the excess supply will once glut the modest demand rise which is expected to come at just 7%.

The winners: raw material companies which have massive pricing power in an environment in which shipping costs are plunging, as well as the shipping companies which have managed to lock in charter contracts at historic rates.

The biggest loser: dry bulk shippers operating at spot, and which have large, debt-funded balance sheets.There the pain will be substantial.

[lucy01] 07/1/2011 16:51

another nibbler. total holding growing. Have feeling next target will be at least as good as the last

Happy Trader

[badtime] 07/1/2011 16:24

lol..ye get ya drift...nibbled on a few of these today

[strollingmolby] 07/1/2011 16:22

Ahem, yes the t/o is still rumbling on, but I took the money and ran to invest in the next opportunity, which was...VAA (when it was sub-cash). As there was a chance the CDN takeover didn't proceed, and a chance VAA would find a target to buy it seemed the sensible thing to do (sense being something I've lacked in recent years!)

[badtime] 07/1/2011 16:06

Re CDN..i thought the ''t/o'' was still in the balance

[flyfisher] 07/1/2011 14:14

simon

financing costs and market listing look to have been holding parts of the business back , it therefore seems logical for the deal to come to london , which is a natural place for a corporate restructuring and associated debt syndication programme to take place . as the broker note comments , if these come through it should give a better investor perception.

a fairly unexciting asset, but not difficult to see a 20% upside over a year , as you noted downside seems limited ,which is important to me , however it will ultimately track energy prices to a degree.
i remain bullish.

[alun rm] 07/1/2011 13:57

Interuption to supply of coal:

[simon gordon] 07/1/2011 13:47

Fly & Stuart,

What are your thoughts after reading the note?

[flyfisher] 07/1/2011 13:43

simon / stuart

was looking at bumi interims to june 2010 and this forward pricing comment stuck out.

Average FOB Selling Price of Coal - RISING
$62.88/ ton in Q1'10 vs $75.21/ton in Q1'09 – reduced by $12.33/ton or down by 16.4%
The impact of lower price and higher fuel cost was largely offset by higher sales volume.
Q1'10 average price of $62.88/ton indicates a hardening of price of price compared with Q4'09 of
$58/ton.
FY'10 price guidance is minimum $67/ton compared with FY'09 of $63.1/ton.
Contracts with Japan for Apr'10 / Mar'11 are being finalized at $104/ton FOB for benchmark
quality. This should reflect in our financials for the remainder of the year.

[simon gordon] 07/1/2011 12:02

Cheers Richied. I remember NWR floating and getting in the FTSE then it tanked in the Crash. Risen from 700p to 1000p since early December. I think the old high was near 3000p. I plan to look at it in more depth. Thanks :-)

EDIT: NWR got to 2000p.

[richied] 07/1/2011 11:55

Simon
I just found a note I made from a report, I can't remember where from, in April 2010.

The essence of which is that coking coal for steel making which accounts for only 4% of world production and therefore can command a premium price is the best place to invest.It highlighted CDN and Western Coal (WTN) both of which are now being taken over. I had WTN on watch but the price was dropping and missed the sharp rise.

Also highlighted was New World Resources (NWR) Czech miner, provides coking coal to Japan, may be worth investigating.

[simon gordon] 07/1/2011 10:07

Strolling,

BSRT looks a solid long-term investment.

I note that some very shrewd ADVFNers are keen on SNRP, they reckon it could fly if they do an offtake deal or two. It seems to be the most speculative coal play as its cap is only £13m. I'm following the thread, the chart is pretty manic.

[strollingmolby] 07/1/2011 09:20

simon - my only coal holding is VAA. Was previously in CDN until the takeover, but that's all. Feel I need more exposure though, and considering BSRT for it (& other resources).

[simon gordon] 07/1/2011 07:17

Strolling,

Thanks for those names.

Which ones are your favoured plays on the sector?

Cheers !

[jon827] 06/1/2011 22:16

No problem, it looks like there's plenty of bubble still to be blown in the price of coal ;-)

[strollingmolby] 06/1/2011 22:11

Jon - thanks for altering the header.

Simon - other London-listed coal stocks I've found:

UKC - UK Coal
WTN - Western Canadian Coal
CZA - Coal of Africa
ATC - Atlantic Coal
NCCL - Ncondezi Coal Company
ATH - ATH Resources
BISI - Bisichi Mining

[simon gordon] 06/1/2011 21:38

These are the London listed coal stocks I know:

PRODUCERS
~Xstrata.
~Bumi.

COAL ON PAPER
~Churchill Mining.
~Strategic Natural Resources.
~GCM Resources.
~Ncondezi Coal.

Does anyone know of some others. I know of Western Coal but I think they are currently being acquired.

[simon gordon] 06/1/2011 21:32

Bloomberg - 6/1/11:

BlackRock's Rice Sees Coal Stocks Doubling

Coal stocks make up about one quarter of Rice's fund, and represent five of his top 10 holdings as of Sept. 30, Morningstar data show. Coal for delivery by barge on the Big Sandy River, a benchmark for Central Appalachian supplies, has climbed to more than $72 a ton from about $54 a ton at the end of 2009, according to data compiled by Bloomberg.

Rice, who has owned the major coal producers for the past nine years, said the price could go to $90 over the next year as U.S. exports to Asia climb. Coal at that level would mean profits high enough to double coal company shares, "as crazy as that sounds," he said.

'Holy Grail'

If scientists find a way to cut carbon emissions from burning coal, a breakthrough Rice thinks is more likely to come from China than the U.S., coal's potential could be enormous, he said.

"It would be like the holy grail," said Rice. "It could mean billions and billions of profits."



*Thanks to contrarian2investor for flagging this article.

[flyfisher] 06/1/2011 17:41

stuart14
thermal coal prices have continued to rise with the disruption to supplies due to the flooding in queensland , with indonesian supplies unaffected the jakarta share price of berau and bumi have risen 5.77% and 8.26% this week.

[strollingmolby] 06/1/2011 12:23

Hi Jon827,

Is it possible to replace the Gold/Copper charts with one for Thermal Coal? Such as this one (in the event a better one can't be found):



Many thanks,

SM

[stuart14] 04/1/2011 12:46

All looking good so far.

[lucy01] 04/1/2011 12:02

interesting activities ongoing. Bought some and find i go ahead every day Good result
Happy Trader

[strollingmolby] 03/1/2011 23:46

Vallar eyes acquisitions to follow Asian deal

[strollingmolby] 21/12/2010 11:16

Interesting Jakarta Post interview with Nat Rothschild:

[miti 1000] 18/12/2010 23:14

Well considering it's just about 5% above the placing price...its still early in the journey. I can see this trading at £15 quid by March 2011 when it should enter the FTSE 100.