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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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Wednesday, 17 February 16
THE OWNERS FACING HISTORICAL LOW DRY BULK RATES; COAL IMPORTS TO CHINA IS STILL POINTING TO A STRONG TREND OF DECLINING CONSUMPTION
The sharp fall in dry bulk rates that has been taking place since the end of last year and has left owners facing historical low rates for a substa ...
Monday, 15 February 16
CALL THE DOCTOR! SHIPPING'S MEDICAL DRAMA UNFOLDS......- CLARKSONS
The recycling market has started 2016 with a bang, with a huge volume of tonnage heading to demolition facilities. Many of the key shipping markets ...
Monday, 15 February 16
CS 42 COAL INDEX ROSE 0.07% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.15 percent week over week to averaging $38.96 per ton on this past Friday, ...
Monday, 15 February 16
BALTIC INDEX MARGINALLY ROSE BY A POINT D-D; CAPESIZE INDEX DOWN 13 POINTS W-W; PANAMAX INDEX UP 29 POINTS W-W
COALspot.com: The freight markets continued to fall this past week.
The BDI, The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measu ...
Friday, 12 February 16
DRY BULK MARKET'S FORTUNES STILL TIED WITH CHINA'S ECONOMY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The inevitable slowdown of the Chinese economy was expected to hurt dry bulk shipping, but few expected the blow to be this hard, especially given ...
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Showing 2561 to 2565 news of total 6871 |
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- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- Essar Steel Hazira Ltd - India
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Coastal Gujarat Power Limited - India
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Mjunction Services Limited - India
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Trasteel International SA, Italy
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Savvy Resources Ltd - HongKong
- Energy Link Ltd, New Zealand
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Tata Chemicals Ltd - India
- Meenaskhi Energy Private Limited - India
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Power Finance Corporation Ltd., India
- GN Power Mariveles Coal Plant, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Bahari Cakrawala Sebuku - Indonesia
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- The University of Queensland
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Straits Asia Resources Limited - Singapore
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Intertek Mineral Services - Indonesia
- Central Java Power - Indonesia
- Baramulti Group, Indonesia
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Parliament of New Zealand
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- GMR Energy Limited - India
- Oldendorff Carriers - Singapore
- Indo Tambangraya Megah - Indonesia
- Ambuja Cements Ltd - India
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- San Jose City I Power Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Kalimantan Lumbung Energi - Indonesia
- Thiess Contractors Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Karbindo Abesyapradhi - Indoneisa
- Economic Council, Georgia
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Ind-Barath Power Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Electricity Generating Authority of Thailand
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Cement Manufacturers Association - India
- Bharathi Cement Corporation - India
- Planning Commission, India
- Sindya Power Generating Company Private Ltd
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GVK Power & Infra Limited - India
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Samtan Co., Ltd - South Korea
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- Semirara Mining and Power Corporation, Philippines
- Grasim Industreis Ltd - India
- Miang Besar Coal Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Romanian Commodities Exchange
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Altura Mining Limited, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
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