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Wednesday, 17 March 21
MARKET INSIGHT - INTERMODAL
 Shipping market players are familiar with the inverse correlation between the freight market and demolition activity i.e. when the market picks up we usually observe demolition activity declining and vice versa, while the level of scrapping eventually contributes to a new market equilibrium.
In order for demolition activity to be impacted in either direction, market expectations for the medium term have to be aligned with actual freight market conditions and thus demolition activity reacts with some time lag to the current freight market environment. The decision to sell a vessel for scrap is not only driven by the state of the market cycle and expectations, but to a great extent by the offered scrap price at the time vs the price fetched at the 2nd hand market.
As we stand, owners of vintage tonnage are obviously trying to exploit the current sound performance across all Dry Bulk & Container segments and prefer to keep their vessels for further trading rather than turning to beach yards. Despite positive market conditions in these two segments, possible demolition candidates could be those old units that have to be docked for surveys and their Owners are not in favor of bearing this cost, or the parties that are looking for a fleet renewal. Still, in order to make the demolition decision tempting for them, scrap prices should rise further. Already, scrap prices have risen more than 10% since the beginning of the year, and are up more than 29% compared to last year.
So far during Q1 2021, the freight market and expectations in the Dry Bulk & containers segment have been extremely optimistic, whilst the wet market is still to recover from the severe downturn experienced as a result of oil supply cuts and soft demand amid the ongoing COVID-19 pandemic. YTD dry bulk scrapping rate in dwt terms is estimated -21% below the same period last year, while tankers scrapping is estimated +91.1% y-o-y.
However, taking a closer look at the tankers sold for scrap, we would expect that the current market conditions (with VLCC rates suppressed since the beginning of the year and recently turning negative) would favor the larger crude carriers towards scrap yards. Instead, since the beginning of the year, about 11 vessels were confirmed to be scrapped with half of them being Handysize or MR tankers, while the rest consist mainly of Aframax, two shuttle tankers and no VLCCs.
We could argue that maybe owners of the larger crude tankers have enough buffer from last year’s stellar earnings amid floating storage economics skyrocketing and thus can sustain adverse market conditions, but also expect that the market will turn a corner should OPEC+ reverses oil supply cuts in the next months. We could also argue that owners prefer to sell their vessels in the 2nd hand market, as the premium they are currently getting over selling them for scrap is quite substantial.
While scrap prices are expected to rise further during the 2H of the year amid increased demand for scrap restocking, it remains to be seen how all of the above factors will impact demolition activity across the different shipping segments, with expectations for tanker scrapping activity increasing nonetheless coming in higher.
By George Kallianiotis,
Valuation Department
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
Mr.George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Wednesday, 22 November 23
INDIA: GOVERNMENT PLANS 1.4 BILLION TONNE COAL OUTPUT BY 2027 - LIVEMINT
The Union coal ministry on Monday announced plans to increase India’s coal production to 1.404 billion tonne by 2027, with an eye to further ...
Wednesday, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
...
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- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Attock Cement Pakistan Limited
- Holcim Trading Pte Ltd - Singapore
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Kumho Petrochemical, South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- CNBM International Corporation - China
- Parliament of New Zealand
- Parry Sugars Refinery, India
- Malabar Cements Ltd - India
- India Bulls Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Salva Resources Pvt Ltd - India
- Indonesian Coal Mining Association
- GVK Power & Infra Limited - India
- White Energy Company Limited
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- Standard Chartered Bank - UAE
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Mercator Lines Limited - India
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Heidelberg Cement - Germany
- Australian Coal Association
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Maheswari Brothers Coal Limited - India
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Indika Energy - Indonesia
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Aditya Birla Group - India
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Indian Oil Corporation Limited
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Ministry of Transport, Egypt
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Petron Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Savvy Resources Ltd - HongKong
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Antam Resourcindo - Indonesia
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- Barasentosa Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Madhucon Powers Ltd - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Indogreen Group - Indonesia
- Marubeni Corporation - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Goldman Sachs - Singapore
- Gujarat Sidhee Cement - India
- New Zealand Coal & Carbon
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Simpson Spence & Young - Indonesia
- Sical Logistics Limited - India
- Indian Energy Exchange, India
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Borneo Indobara - Indonesia
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- The University of Queensland
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Essar Steel Hazira Ltd - India
- Kepco SPC Power Corporation, Philippines
- Planning Commission, India
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Siam City Cement PLC, Thailand
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Deloitte Consulting - India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Rashtriya Ispat Nigam Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Billiton Holdings Pty Ltd - Australia
- Sindya Power Generating Company Private Ltd
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