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Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
 Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at that time as some of the most lucrative shipping deals ever seen. Today, with the price back at $13m, perhaps it’s a good time to reflect on how successful investors were back in 1999 and whether there are similar opportunities once again.
What Was The Deal?
The graph shows for each year since 1990 the return that would have been generated by the purchase of a 5 year old Panamax bulkcarrier at the start of the year, the subsequent operation for ten years at the prevailing one year timecharter rate and then the sale of the unit at the end of that period as a 15 year old (for units purchased in 2007 and later, disposal at start 2016 was assumed). At the end of 1999 investors could pick up a 5 year old Panamax bulker for $14m. Trading that vessel at the start year one year timecharter rate for 10 years would have generated estimated earnings of $66.5m (after opex), and then as a 15 year old unit in 2009 the vessel could have been sold for $12.5m. That’s a small loss of $1.5m on the asset but still a total return of $65m, and an impressive internal rate of return (IRR) of 26%.
Playing Snap
A few years later, 5 year old Panamax bulkcarrier purchases did perhaps even better. Buying a 5 year old in 2002, once again at $14m, trading at the timecharter rate and selling as a 15 year old would have generated total returns of $73.2m and an IRR of 41%, whilst the equivalent project in 2003 would have generated $66.1m and an IRR of 44%. These vessels would have generated boom earnings earlier in the project period, subject to a heavier weighting in terms of the internal rate of return calculation.
Not Always A Good Hand
However, not all investors are so lucky. In this example, 5 year old ships purchased since 2008 (and sold this year, so admittedly with less time to hit upon a period of boom earnings) generated negative returns, and those purchased pre-1995 an average IRR of 7%. Buyers in 2008 would have lost a whopping $82.1m on the asset. Nevertheless, there was clearly a golden period; in the years 1998-2006 investors would have achieved an IRR ranging between 20% and 44%.
Unlucky (Or Lucky) 13?
So for those who have had the stomach to buy in at difficult times, there have been more than ample rewards. Today the price of a 5 year old Panamax is back at $13m. Dry bulk fundamentals, particularly on the demand side with the Chinese economy maturing, don’t look helpful at all (see SIW 1207), but with the 5 year old price at almost half that of a newbuild, who really knows what the longer-term opportunity might be?
Fortune favours the brave, but they also say that fools rush in. The outlook seems scary but investors might also have half an eye on their peers who invested at low points in the price cycle in the past. That’s the beauty of volatile and cyclical sectors, but it’s tricky food for thought for shipping investors. Are they willing to party like it’s 1999? Have a nice day.
Source: Clarksons
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Thursday, 24 March 16
NEWBUILDINGS' PRICES HAVE STARTED TO COME DOWN - ALLIED | HELLENIC SHIPPING NEWS
Newbuildings’ prices have started to come down, as demand has remained subdued for quite some time now. In its latest weekly report, shipbrok ...
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 ...
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Showing 2511 to 2515 news of total 6871 |
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- Banpu Public Company Limited - Thailand
- Deloitte Consulting - India
- Eastern Coal Council - USA
- Formosa Plastics Group - Taiwan
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Goldman Sachs - Singapore
- Tamil Nadu electricity Board
- Australian Coal Association
- Attock Cement Pakistan Limited
- Economic Council, Georgia
- Edison Trading Spa - Italy
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Madhucon Powers Ltd - India
- Toyota Tsusho Corporation, Japan
- Bukit Baiduri Energy - Indonesia
- Power Finance Corporation Ltd., India
- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Petron Corporation, Philippines
- ASAPP Information Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jindal Steel & Power Ltd - India
- GVK Power & Infra Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rashtriya Ispat Nigam Limited - India
- Sojitz Corporation - Japan
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Indian Oil Corporation Limited
- Cement Manufacturers Association - India
- International Coal Ventures Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Bangladesh Power Developement Board
- Energy Development Corp, Philippines
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement PLC, Thailand
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- GMR Energy Limited - India
- Latin American Coal - Colombia
- London Commodity Brokers - England
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Meralco Power Generation, Philippines
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Karaikal Port Pvt Ltd - India
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Mercator Lines Limited - India
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Leighton Contractors Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- SN Aboitiz Power Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- PTC India Limited - India
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Thiess Contractors Indonesia
- MS Steel International - UAE
- The Treasury - Australian Government
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Meenaskhi Energy Private Limited - India
- Maheswari Brothers Coal Limited - India
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Vijayanagar Sugar Pvt Ltd - India
- Georgia Ports Authority, United States
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Makarim & Taira - Indonesia
- New Zealand Coal & Carbon
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Vedanta Resources Plc - India
- Iligan Light & Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- South Luzon Thermal Energy Corporation
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Parliament of New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Electricity Authority, New Zealand
- Billiton Holdings Pty Ltd - Australia
- SMC Global Power, Philippines
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Singapore Mercantile Exchange
- Port Waratah Coal Services - Australia
- Indonesian Coal Mining Association
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Uttam Galva Steels Limited - India
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Sakthi Sugars Limited - India
- Antam Resourcindo - Indonesia
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- Wood Mackenzie - Singapore
- Krishnapatnam Port Company Ltd. - India
- Chamber of Mines of South Africa
- Straits Asia Resources Limited - Singapore
- Chettinad Cement Corporation Ltd - India
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Agrawal Coal Company - India
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
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