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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, 03 March 16
BDI FURTHER STRENGTHENING; THE INCREASE IN RATES WAS NOT SUBSTANTIAL
COALspot.com: The BDI closed off on a positive note for a second week in a row, further strengthening the belief that the market might be bottoming ...
Thursday, 03 March 16
RIO TINTO COMPLETES SALE OF INTEREST IN BENGALLA JOINT VENTURE FOR US$616.7 MILLION
COALspot.com: Rio Tinto has completed the sale of its 40 per cent interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation ...
Wednesday, 02 March 16
RE-EVALUATION OF MINING LICENSES CLEAN AND CLEAR STATUS IN INDONESIA
COALspot.com: In connection with the transfer of mining authority from Regents/Mayors to Governors1 and from Regents/Mayors and Governors to t ...
Wednesday, 02 March 16
OIL MY GOD.....!!!!
OIL my GOD….!!!!
The oil price “crash” that started in 2014 was caused by a glut of practically unwanted oil. Producers had be ...
Tuesday, 01 March 16
CS 42 (4200 GAR) COAL INDEX CLOSED AT US$ 27.11 A TON ON 26 FEBRUARY
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.31 percent week over week to averaging $38.77 per ton on this past Friday, ...
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Showing 2541 to 2545 news of total 6871 |
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- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Transport, Egypt
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Medco Energi Mining Internasional
- Kobexindo Tractors - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Coal Association
- Makarim & Taira - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- Sinarmas Energy and Mining - Indonesia
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Renaissance Capital - South Africa
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Lanco Infratech Ltd - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Standard Chartered Bank - UAE
- CIMB Investment Bank - Malaysia
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Borneo Indobara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Mjunction Services Limited - India
- Parry Sugars Refinery, India
- Miang Besar Coal Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Aditya Birla Group - India
- Global Green Power PLC Corporation, Philippines
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Indonesian Coal Mining Association
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Vizag Seaport Private Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Malabar Cements Ltd - India
- Meralco Power Generation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bhoruka Overseas - Indonesia
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Meenaskhi Energy Private Limited - India
- TeaM Sual Corporation - Philippines
- Siam City Cement PLC, Thailand
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Orica Australia Pty. Ltd.
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Mines - Canada
- Coastal Gujarat Power Limited - India
- CNBM International Corporation - China
- Singapore Mercantile Exchange
- Straits Asia Resources Limited - Singapore
- Planning Commission, India
- Bahari Cakrawala Sebuku - Indonesia
- Oldendorff Carriers - Singapore
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Deloitte Consulting - India
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- The State Trading Corporation of India Ltd
- Rashtriya Ispat Nigam Limited - India
- Australian Commodity Traders Exchange
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Salva Resources Pvt Ltd - India
- Carbofer General Trading SA - India
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Commonwealth Bank - Australia
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Coalindo Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
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