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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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Monday, 23 November 15
NEGATIVE 2016 OUTLOOK FOR WESTERN EUROPEAN STEEL - SAYS FITCH RATINGS
COALspot.com: European steel in 2016 are both negative for the sector and for issuer ratings.
This reflects our expectation that import levels ...
Monday, 23 November 15
DRY BULK MARKET: NET FLEET GROWTH IS SLOWING DOWN, AS SHIP OWNERS ARE LOOKING FOR WAYS TO ALLEVIATING MARKET MELTDOWN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has been in “meltdown” mode for a few weeks now, unable to find support and avoid the fall in historical lows. As s ...
Monday, 23 November 15
CS50 COAL INDEX CLOSED AT $40.27 PER TON; FELL 0.15% FROM LAST WEEK
COALspot.com: The 5700 GAR CS (i) coal index fell by US cents 3 per ton week over week on 20 November 2015. CS 57 (5700 GAR coal) index closed at U ...
Monday, 23 November 15
CFR SOUTH CHINA COAL SWAPS FALL FURTHER ON LOW DEMAND
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery declined US$ 6.75 (13.99%) per ton month over month.
A commodity swa ...
Sunday, 22 November 15
INDONESIA TO INDIA FREIGHT RATES TO REMAIN DULL NEXT WEEK
COALspot.com: The BDI was down to historical lows closing at 498 points which is down by almost 95.77 per cent compared to 11,800 points in 2008.
...
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Showing 2696 to 2700 news of total 6871 |
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- PetroVietnam Power Coal Import and Supply Company
- Jorong Barutama Greston.PT - Indonesia
- Marubeni Corporation - India
- Wilmar Investment Holdings
- Maharashtra Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Therma Luzon, Inc, Philippines
- Indian Energy Exchange, India
- Jaiprakash Power Ventures ltd
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Sakthi Sugars Limited - India
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Indogreen Group - Indonesia
- Singapore Mercantile Exchange
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Australian Coal Association
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Metalloyd Limited - United Kingdom
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- GN Power Mariveles Coal Plant, Philippines
- Economic Council, Georgia
- Independent Power Producers Association of India
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- SN Aboitiz Power Inc, Philippines
- Sojitz Corporation - Japan
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- Ind-Barath Power Infra Limited - India
- Rashtriya Ispat Nigam Limited - India
- Gujarat Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- Ministry of Mines - Canada
- Trasteel International SA, Italy
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Banpu Public Company Limited - Thailand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Sinarmas Energy and Mining - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Eastern Coal Council - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Lanco Infratech Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Sree Jayajothi Cements Limited - India
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Energy Link Ltd, New Zealand
- Bhoruka Overseas - Indonesia
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bulk Trading Sa - Switzerland
- Sical Logistics Limited - India
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- GMR Energy Limited - India
- Attock Cement Pakistan Limited
- IEA Clean Coal Centre - UK
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Medco Energi Mining Internasional
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- GAC Shipping (India) Pvt Ltd
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- San Jose City I Power Corp, Philippines
- Parliament of New Zealand
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Electricity Authority, New Zealand
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- Minerals Council of Australia
- Mintek Dendrill Indonesia
- Edison Trading Spa - Italy
- Coastal Gujarat Power Limited - India
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- Indian Oil Corporation Limited
- Global Coal Blending Company Limited - Australia
- Ambuja Cements Ltd - India
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- New Zealand Coal & Carbon
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- VISA Power Limited - India
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- ICICI Bank Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
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