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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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Saturday, 09 January 16
BALTIC DRY INDEX SINKS 10% WEEK OVER WEEK TO AN ALL-TIME LOW OF 429 POINTS
COALspot.com: The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, decline around 10% we ...
Friday, 08 January 16
FOB INDONESIA COAL SWAP FOR DELIVERY H1'16 REMAIN FLAT AS DEMAND DROPS OFF
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month, flat week over week. The price for coal has been in a Dull Market sinc ...
Friday, 08 January 16
FOB RICHARDS BAY COAL SWAP FOR Q2'16 DELIVERY CLOSED UP $0.13 AT $45.50 PER TON
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 FOB R ...
Friday, 08 January 16
WEEKLY US COAL PRODUCTION DECLINES 1.6% TO 11.7 MMST, SAYS EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 11.7million short ...
Friday, 08 January 16
DRY BULK MARKET'S CRISIS DEEPENS AS RATES ARE DROPPING TO NEW RECORD LOWS BY THE DAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Just when you would think that the dry bulk market is reaching its bottom, even as it has long surpassed all-time lows, each day that passes by at ...
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Showing 2616 to 2620 news of total 6871 |
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- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bangladesh Power Developement Board
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Dalmia Cement Bharat India
- Wilmar Investment Holdings
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- SN Aboitiz Power Inc, Philippines
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Malabar Cements Ltd - India
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Independent Power Producers Association of India
- Vedanta Resources Plc - India
- IEA Clean Coal Centre - UK
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Ministry of Mines - Canada
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Straits Asia Resources Limited - Singapore
- Meralco Power Generation, Philippines
- Planning Commission, India
- Kepco SPC Power Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Manunggal Multi Energi - Indonesia
- Port Waratah Coal Services - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CNBM International Corporation - China
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- SMC Global Power, Philippines
- Meenaskhi Energy Private Limited - India
- Rio Tinto Coal - Australia
- Romanian Commodities Exchange
- SMG Consultants - Indonesia
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Heidelberg Cement - Germany
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Formosa Plastics Group - Taiwan
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Videocon Industries ltd - India
- Chettinad Cement Corporation Ltd - India
- Agrawal Coal Company - India
- Bukit Asam (Persero) Tbk - Indonesia
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Renaissance Capital - South Africa
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Bukit Baiduri Energy - Indonesia
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Barasentosa Lestari - Indonesia
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- IHS Mccloskey Coal Group - USA
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GMR Energy Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- White Energy Company Limited
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Electricity Authority, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- VISA Power Limited - India
- Indonesian Coal Mining Association
- The University of Queensland
- Sakthi Sugars Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Economic Council, Georgia
- Uttam Galva Steels Limited - India
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Sical Logistics Limited - India
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- International Coal Ventures Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Central Electricity Authority - India
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Power Finance Corporation Ltd., India
- Deloitte Consulting - India
- PTC India Limited - India
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Indian Oil Corporation Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Eastern Coal Council - USA
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Sojitz Corporation - Japan
- Global Green Power PLC Corporation, Philippines
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Price Waterhouse Coopers - Russia
- Simpson Spence & Young - Indonesia
- Kideco Jaya Agung - Indonesia
- Global Business Power Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Kaltim Prima Coal - Indonesia
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Minerals Council of Australia
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Sinarmas Energy and Mining - Indonesia
- Commonwealth Bank - Australia
- Coal and Oil Company - UAE
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