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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, 28 January 16
RICHARDS BAY COAL SWAPS FOR Q1,Q2 AND Q3 DELIVERIES FIRM THIS PAST WEEK
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap rose month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coa ...
Wednesday, 27 January 16
API 5 FOB NEWCASTLE COAL SWAPS CLOSE MIXED
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.17 per ton (3.13%) this past week compared to the sam ...
Wednesday, 27 January 16
CHINA'S STALLING ECONOMY HAS HAD A GREAT EFFECT ON VARIOUS COMMODITIES; DECREASED DEMAND DRIVING COMMODITY PRICES LOWER AND LOWER - LINOS ALEXANDROS KOGEVINAS
Having gone through the first few weeks of 2016, it’s starting to look like another challenging year is ahead of us. Hopes for a recovery in ...
Wednesday, 27 January 16
WORLD HARD COAL PRODUCTION AND CONSUMPTION DECLINE IN 2015 FOR THE FIRST TIME IN OVER A DECADE - VDKI
COALspot.com: Seaborne hard coal trade and the changes in this area were decisively affected by China and India - VDKi.
China bears the g ...
Tuesday, 26 January 16
Q3'16 CFR SOUTH CHINA COAL SWAP DROPPED BELOW $41 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.82 (1.94%) per ton month over month.
A commodity swap is ...
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Showing 2586 to 2590 news of total 6871 |
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- Pipit Mutiara Jaya. PT, Indonesia
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- IHS Mccloskey Coal Group - USA
- Bukit Baiduri Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Essar Steel Hazira Ltd - India
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Parry Sugars Refinery, India
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Kalimantan Lumbung Energi - Indonesia
- Petron Corporation, Philippines
- VISA Power Limited - India
- White Energy Company Limited
- Videocon Industries ltd - India
- Ambuja Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Coalindo Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Sree Jayajothi Cements Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kumho Petrochemical, South Korea
- Grasim Industreis Ltd - India
- Salva Resources Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Vedanta Resources Plc - India
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Gujarat Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Sindya Power Generating Company Private Ltd
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
- Global Green Power PLC Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- SMG Consultants - Indonesia
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Economic Council, Georgia
- Star Paper Mills Limited - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Carbofer General Trading SA - India
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Kartika Selabumi Mining - Indonesia
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Bharathi Cement Corporation - India
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Iligan Light & Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Formosa Plastics Group - Taiwan
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Borneo Indobara - Indonesia
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- PNOC Exploration Corporation - Philippines
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- MS Steel International - UAE
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Central Java Power - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Parliament of New Zealand
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Barasentosa Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- Trasteel International SA, Italy
- Posco Energy - South Korea
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Indian Oil Corporation Limited
- Eastern Energy - Thailand
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- OPG Power Generation Pvt Ltd - India
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