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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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Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
This year, the use of coal by the U.S.’s power producers has been so anemic that the fuel has not achieved a 20% market share in any month so ...
Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- ASAPP Information Group - India
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Transport, Egypt
- Toyota Tsusho Corporation, Japan
- Malabar Cements Ltd - India
- Indika Energy - Indonesia
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Ministry of Mines - Canada
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Petron Corporation, Philippines
- Directorate Of Revenue Intelligence - India
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- PTC India Limited - India
- Trasteel International SA, Italy
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Mercuria Energy - Indonesia
- Indogreen Group - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Alfred C Toepfer International GmbH - Germany
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Borneo Indobara - Indonesia
- Orica Mining Services - Indonesia
- Gujarat Sidhee Cement - India
- Holcim Trading Pte Ltd - Singapore
- Singapore Mercantile Exchange
- Baramulti Group, Indonesia
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Aboitiz Power Corporation - Philippines
- Renaissance Capital - South Africa
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Meralco Power Generation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- CNBM International Corporation - China
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Central Java Power - Indonesia
- San Jose City I Power Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- Medco Energi Mining Internasional
- Pipit Mutiara Jaya. PT, Indonesia
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Australian Coal Association
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- New Zealand Coal & Carbon
- Edison Trading Spa - Italy
- International Coal Ventures Pvt Ltd - India
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Star Paper Mills Limited - India
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- Kaltim Prima Coal - Indonesia
- GVK Power & Infra Limited - India
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Tamil Nadu electricity Board
- AsiaOL BioFuels Corp., Philippines
- Binh Thuan Hamico - Vietnam
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Vedanta Resources Plc - India
- Australian Commodity Traders Exchange
- Grasim Industreis Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Kepco SPC Power Corporation, Philippines
- Chettinad Cement Corporation Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- CIMB Investment Bank - Malaysia
- Samtan Co., Ltd - South Korea
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Romanian Commodities Exchange
- Electricity Authority, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- The University of Queensland
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- GMR Energy Limited - India
- Independent Power Producers Association of India
- GAC Shipping (India) Pvt Ltd
- Eastern Coal Council - USA
- Meenaskhi Energy Private Limited - India
- Deloitte Consulting - India
- Thiess Contractors Indonesia
- Economic Council, Georgia
- Goldman Sachs - Singapore
- Port Waratah Coal Services - Australia
- Siam City Cement - Thailand
- Riau Bara Harum - Indonesia
- Posco Energy - South Korea
- Kohat Cement Company Ltd. - Pakistan
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Coal and Oil Company - UAE
- Price Waterhouse Coopers - Russia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Kumho Petrochemical, South Korea
- MS Steel International - UAE
- Uttam Galva Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
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