We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
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
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Wednesday, 25 November 15
BIG CHINESE COPPER PROCESSORS DEFEND MARGINS THROUGH R&D, SAYS FITCH
Large Chinese copper processors are focusing on higher value-added products and investing in R&D to enhance their technical know-how to maintai ...
Wednesday, 25 November 15
BIMCO LAUNCHES ANTI-CORRUPTION CLAUSE FOR SHIPPING CONTRACTS WORLDWIDE
COALspot.com: BIMCO, is the world’s largest international shipping association, with 2,200 members in around 130 countries, has now launched ...
Wednesday, 25 November 15
TANKER MARKET INSIGHT - GEORGE VASTARDIS
We have already noticed obvious signs of activity mainly West of Suez, which are currently driving the clean MR market to higher levels. Over the p ...
Tuesday, 24 November 15
COAL SUPPLY PRESSURE PUTS INDONESIAN HBA IN FREE FALL
The coal industry is slowly recognizing that, the current coal price level is not a decrease in price, but a change in pricing to corresp ...
Tuesday, 24 November 15
COAL PRICES SET TO REMAIN UNDER PRESSURE UNTIL 2016 DUE TO OVER SUPPLY GLUT; H1 '16 COAL SWAPS DOWN 13% M-M
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery slid $5 per ton (12.05%) month over month to US$ 36.50 per ton. The s ...
|
|
|
Showing 2691 to 2695 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Aboitiz Power Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Electricity Generating Authority of Thailand
- OPG Power Generation Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Deloitte Consulting - India
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Riau Bara Harum - Indonesia
- AsiaOL BioFuels Corp., Philippines
- LBH Netherlands Bv - Netherlands
- Pendopo Energi Batubara - Indonesia
- Electricity Authority, New Zealand
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- MS Steel International - UAE
- Samtan Co., Ltd - South Korea
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- White Energy Company Limited
- Wilmar Investment Holdings
- Cement Manufacturers Association - India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- GMR Energy Limited - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
- Australian Coal Association
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Singapore Mercantile Exchange
- Mercuria Energy - Indonesia
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Kumho Petrochemical, South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Bhushan Steel Limited - India
- Power Finance Corporation Ltd., India
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Billiton Holdings Pty Ltd - Australia
- Sarangani Energy Corporation, Philippines
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Malabar Cements Ltd - India
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Makarim & Taira - Indonesia
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Kobexindo Tractors - Indoneisa
- Thiess Contractors Indonesia
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Kideco Jaya Agung - Indonesia
- Romanian Commodities Exchange
- Bukit Makmur.PT - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Georgia Ports Authority, United States
- Karbindo Abesyapradhi - Indoneisa
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Antam Resourcindo - Indonesia
- Salva Resources Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- PTC India Limited - India
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
|
| |
| |
|
