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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, 13 January 16
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Going through the second week of 2016 we could easily argue that at this point there are no visible signs of an imminent recovery in the Dry Bulk m ...
Wednesday, 13 January 16
IRON ORE IMPASSE - A FAILED CLAIM FOR CONVERSION - CLYDE & CO
KNOWLEDGE TO ELEVATE
In the recent case of the “Bao Yue”, the English High Court found that the bill of lading holder was liable t ...
Tuesday, 12 January 16
5700 GAR COAL FOR DELIVERY WITHIN Q1 FELL 0.91% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin moved South direction week over week to averaging $39.96 per ton on last Friday, acc ...
Monday, 11 January 16
PORT OF NEWCASTLE SHIPPED 20% MORE COAL IN DECEMBER 2015; AVERAGE SELLING PRICE DECLINE 3.43%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $1.129 billio ...
Sunday, 10 January 16
LNG BUNKERING IN ASIA: FUELING A PROMISING FUTURE? - REED SMITH
The requirement of a mandatory reduction of sulphur content in bunker fuel proposed by the International Maritime Organisation (IMO) poses a challe ...
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Showing 2611 to 2615 news of total 6871 |
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- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Interocean Group of Companies - India
- Orica Australia Pty. Ltd.
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- PTC India Limited - India
- Kaltim Prima Coal - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- SMC Global Power, Philippines
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- CIMB Investment Bank - Malaysia
- Indo Tambangraya Megah - Indonesia
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Kartika Selabumi Mining - Indonesia
- Karaikal Port Pvt Ltd - India
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Malabar Cements Ltd - India
- Parry Sugars Refinery, India
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Timah Investasi Mineral - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Essar Steel Hazira Ltd - India
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Cement Manufacturers Association - India
- GMR Energy Limited - India
- MS Steel International - UAE
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Ministry of Transport, Egypt
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- LBH Netherlands Bv - Netherlands
- Renaissance Capital - South Africa
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- The State Trading Corporation of India Ltd
- Anglo American - United Kingdom
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Bhoruka Overseas - Indonesia
- Altura Mining Limited, Indonesia
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Bukit Makmur.PT - Indonesia
- ICICI Bank Limited - India
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- PNOC Exploration Corporation - Philippines
- PowerSource Philippines DevCo
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- Xindia Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Tamil Nadu electricity Board
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Independent Power Producers Association of India
- New Zealand Coal & Carbon
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Manunggal Multi Energi - Indonesia
- Minerals Council of Australia
- GN Power Mariveles Coal Plant, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Gujarat Sidhee Cement - India
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- White Energy Company Limited
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Thiess Contractors Indonesia
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Attock Cement Pakistan Limited
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Gujarat Electricity Regulatory Commission - India
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Sree Jayajothi Cements Limited - India
- European Bulk Services B.V. - Netherlands
- Metalloyd Limited - United Kingdom
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