We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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 $13m. Dry bulk fundamentals, particularly on the demand side with the Chinese economy maturing, don’t look helpful at all (see SIW 1207), but with the 5 year old price at almost half that of a newbuild, who really knows what the longer-term opportunity might be?
Fortune favours the brave, but they also say that fools rush in. The outlook seems scary but investors might also have half an eye on their peers who invested at low points in the price cycle in the past. That’s the beauty of volatile and cyclical sectors, but it’s tricky food for thought for shipping investors. Are they willing to party like it’s 1999? Have a nice day.
Source: Clarksons
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Friday, 18 March 16
OUTLOOK ON GLOBAL SHIPPING SECTOR TURNS NEGATIVE AS SUPPLY-DEMAND GAP WIDENS AND EBITDA DECLINES - MOODY'S
Moody’s Investors Service (Moody’s) has changed its outlook on the global shipping sector to negative as it expects supply growth to ou ...
Friday, 18 March 16
DRY BULK MARKET HAS LITTLE TO LOOK FORWARD TO FROM CHINA AT THE MOMENT - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market’s rebound is long overdue, but when it comes, it won’t be because of China’s strong demand for commodities, o ...
Friday, 18 March 16
COAL PRODUCTION IN THE UNITED STATES SLIGHTLY DECREASED THIS WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 12.5 million shor ...
Thursday, 17 March 16
THE PANAMAX MARKET SEEMS TO BE A BIT TOPPISH THIS WEEK - FEARNLEYS
Cape
There are challenging days with rates or less unchanged from last week; West Australia to China still below US$ 3 pmt, and Tuarao to China i ...
Wednesday, 16 March 16
OIL SUPPLY OUTPACES DEMAND ON ANY GIVEN DAY, AND BILLIONS OF BARRELS OF OIL ARE BEING STORED RATHER THAN CONSUMED - CHRISTOPHER
Oil producers have turned to the concept of limiting their output to January levels as a certain form of action to boost prices that have fallen mo ...
|
|
|
Showing 2516 to 2520 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Star Paper Mills Limited - India
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Goldman Sachs - Singapore
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Coastal Gujarat Power Limited - India
- Bhatia International Limited - India
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- Central Electricity Authority - India
- MS Steel International - UAE
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Tamil Nadu electricity Board
- Altura Mining Limited, Indonesia
- Central Java Power - Indonesia
- PTC India Limited - India
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Mercuria Energy - Indonesia
- Eastern Energy - Thailand
- Economic Council, Georgia
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Global Green Power PLC Corporation, Philippines
- Indogreen Group - Indonesia
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Commonwealth Bank - Australia
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- SMC Global Power, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- The University of Queensland
- Carbofer General Trading SA - India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Wilmar Investment Holdings
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Siam City Cement - Thailand
- GN Power Mariveles Coal Plant, Philippines
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- SN Aboitiz Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Makarim & Taira - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- PowerSource Philippines DevCo
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- White Energy Company Limited
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- SMG Consultants - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Coal Blending Company Limited - Australia
- Globalindo Alam Lestari - Indonesia
- Minerals Council of Australia
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Parry Sugars Refinery, India
- IHS Mccloskey Coal Group - USA
- Rio Tinto Coal - Australia
- Medco Energi Mining Internasional
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Sakthi Sugars Limited - India
- Samtan Co., Ltd - South Korea
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- Maharashtra Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
|
| |
| |
|
