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Tuesday, 01 December 15
TANKERS VERSUS BULKERS - JUST PLAYING CATCH UP? - CLARKSONS
 It’s now more than a year since the tanker market took off. In mid-2014 tanker earnings picked up and since then have been in the $30-$40,000/day range. But the market remains nervous. This tanker pick-up coincided with a slump in dry bulk earnings, which is interesting because on paper bulkers and tankers both seem to have surplus capacity. So why are tankers doing so much better than bulkers?
Long-Term Premium
On an “all sizes average” basis tanker earnings generally exceed bulker earnings (the tanker “basket” contains a greater share of larger ships). For example, between 1990 and 2015 to date tanker earnings averaged $24,996/day, whilst bulkers earned $13,933/day. That gives tankers a 79% premium over bulkers. During the seven years since the Credit Crisis, the premium has remained. Tankers have earned $18,281/day, compared to bulkers’ $12,427/day, a 47% premium. So the “premium” relationship held, even during a period of deep recession.
Earnings Distribution
However, during the period of recession tanker earnings have swung from below to above “average premium levels”. To illustrate this point we have estimated what tanker earnings “should have been” over the last seven years if they had followed the “average premium” relationship with bulker earnings over the full period back to 1990. This relationship was estimated using a regression equation as a “rule of thumb”, using monthly data for the period 1990 to 2015, and then used to estimate tanker earnings since 2009 from bulker earnings, shown by the red line on the graph.
For the first five years tankers underperformed compared to the long-term “average premium” versus bulkers, with the blue line, showing actual earnings, below the red line. But in 2014 they started to exceed the expected premium as bulker earnings dropped and tanker earnings increased. Currently tanker earnings offer a significant “bonus” above the estimated “norm”, at levels about six times higher than bulker earnings.
More Than One Answer
So what’s going on? The first answer is that tankers are playing “catch up” for the bad run early in the recession. But there are other answers to the question. One is that in 2015 oil trade has grown much faster than expected, increasing by 4% compared with only 2% expected earlier in the year. Another is the oil price collapse from over $100/bbl to close to $40/bbl, creating an opportunity for arbitrage by holding oil in ships, in anticipation of a price increase. Additionally, of course, bulkers have suffered from an absence of demand growth this year.
The Usual Suspects?
So there you have it. The tanker boom has gone on longer than many might have anticipated and tanker earnings are outperforming their long-run relationship with bulker earnings. But a “fundamental” surplus remains and investors might be right to be cautious. Scrapping has almost stopped, ordering has picked up and supply growth is set to increase. So, enjoy it while you can, and remember that it’s partly a game of catch up.
Have a nice day.
Source: Clarksons | Hellenic Shipping News
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Friday, 27 November 15
FOB RICHARDS BAY COAL SWAPS UP FROM LAST WEEK
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q1’ 2016 up week over week and month over month.
The Q1’ 2016 swa ...
Thursday, 26 November 15
ITALY'S STEAM COAL IMPORTS EXPECTED TO REACH 16 MILLION TONS AND COKING COAL IMPORTS TO AMOUNT TO 4 MILLION TONS - ASSOCARBONI
ASSOCARBONI LOOKS AT COAL FROM A DIFFERENT ANGLE
- “Coal has made huge steps towards environmental sustainability, making itself t ...
Thursday, 26 November 15
DRY BULK MARKET WILL REBOUND EVENTUALLY, BUT THINGS WILL BECOME EVEN WORSE BEFORE THEY IMPROVE SAYS SHIPBROKER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As the dry bulk market’s benchmark, the Baltic Dry Index (BDI) reached an all-time late last week and has failed to rebound significantly eve ...
Thursday, 26 November 15
Q3'16 FOB NEWCASTLE COAL SWAP FALLS 27.5% SINCE 20 FEB 2015
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $5 per ton (12.05%) month over month to US$ 36.50 per ton. The s ...
Wednesday, 25 November 15
INDIA'S POWER GENERATORS FACE LOW, FALLING UTILISATION RATE - FITCH
COAlspot.com: Fitch Ratings says in a new report that the utilisation rate of India's thermal power generation capacity continued to decline in ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Orica Mining Services - Indonesia
- The State Trading Corporation of India Ltd
- Port Waratah Coal Services - Australia
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Directorate General of MIneral and Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Rio Tinto Coal - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Iligan Light & Power Inc, Philippines
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Tamil Nadu electricity Board
- Eastern Coal Council - USA
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Baramulti Group, Indonesia
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Oldendorff Carriers - Singapore
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- PowerSource Philippines DevCo
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Central Electricity Authority - India
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Mercator Lines Limited - India
- Sakthi Sugars Limited - India
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Parliament of New Zealand
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Planning Commission, India
- Price Waterhouse Coopers - Russia
- Kohat Cement Company Ltd. - Pakistan
- Metalloyd Limited - United Kingdom
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Therma Luzon, Inc, Philippines
- Vizag Seaport Private Limited - India
- Bulk Trading Sa - Switzerland
- Bangladesh Power Developement Board
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- PNOC Exploration Corporation - Philippines
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- Minerals Council of Australia
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- Australian Coal Association
- Edison Trading Spa - Italy
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Kobexindo Tractors - Indoneisa
- The Treasury - Australian Government
- PetroVietnam Power Coal Import and Supply Company
- The University of Queensland
- Electricity Authority, New Zealand
- India Bulls Power Limited - India
- Bhoruka Overseas - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- South Luzon Thermal Energy Corporation
- TNB Fuel Sdn Bhd - Malaysia
- Heidelberg Cement - Germany
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Antam Resourcindo - Indonesia
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sical Logistics Limited - India
- LBH Netherlands Bv - Netherlands
- Toyota Tsusho Corporation, Japan
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Deloitte Consulting - India
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- New Zealand Coal & Carbon
- Dalmia Cement Bharat India
- Mintek Dendrill Indonesia
- Borneo Indobara - Indonesia
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
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