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Wednesday, 09 June 21
MARKET INSIGHT - INTERMODAL
 “Counter cyclical investments.” usually take place by investing in a “bad” market at the point that ensures that the acquired asset exposes the buyer less. This has always been the essence of investing in most industries. Of course, like everything else, it’s is easier said than done when a market is going through a trough. Apart from the purchase cost, you still have to spend money in order to subsidize the asset until the market recovers. And of course, there is always the question of whether the market has reached a bottom or not. Anyway, all of these are known.
So now that we are experiencing a bullish dry bulk market and a phenomenal container market, it might be logical to speculate that tankers are not far behind on their way to recovery. With that said, investing in tankers is the only counter cyclical move you could do today at least within the 3 vanilla sectors.
Currently, the tanker market continues to remain weak on the back of constrained oil supply from OPEC+, but last year’s record high crude oil inventories have drawn down extensively, currently are at the bottom of the 5 year average range. At the same time, oil demand is set to recover signaling that the tanker trough might be hopefully ending. Goldman Sachs projects oil demand to increase by +5.0 million barrels per day over the next 6 months, with this summer particularly likely to witness the biggest ever oil demand increase. Additional oil supplies will need to flow into the market; OPEC+ has already decided to gradually increase production through July. A favorable scenario would dictate a further increase in OPEC+ supply by Q4, even if Iranian barrels return to the market, in order to cope with the demand.
But up to this date, despite a lackluster tanker freight market, asset values have increased as underlying steel prices have reached record high levels providing support. The increase in tanker asset values has been more pronounced for younger units, where the majority of SnP interest lies, rather than older ones.
Since January, approximately 124 tankers have changed hands, with the majority being AFRAs (58), followed by VLCCs (41) and SUEZMAXs (25). It makes sense for shipowners to look into buying second hand crude ships purely out of speculation as a tanker recovery is well overdue. The majority of the ships sold were in the 13-17 years age bracket, mostly due to high supply of candidates (e.g. approx. 38% of the Aframax fleet is above 15Y Old). It is certain that a lot of buyers bidding on 12-13 year ships would also go after 10Y or 8Y old tonnage if there was availability.
Recently, we have seen an increase in interest for ships built in after 2010 and almost no interest for older ships with the asset value gains shaped accordingly. Indicatively, 10Y old Aframax values are estimated to have increased by +27.0% since Q4 2020, while 15Y old values have only gained +14.0% over the same period. It might make sense to assume that since the anticipated recovery is yet to be seen, buyers are not willing to risk it on older ships. But given what we are currently witnessing on the dry and box sectors is this wise?
We see 10-15 year old container ships that a year ago might have being sold at demolition levels now being fixed for 4-5 years in the low 40k for further trading. We are witnessing the so called obsolete 28k handy fetching above 20k p/d. Although the tanker regulatory environment, makes older crude tankers less competitive in traditional trades where oil majors are involved even in a tanker recovery, the 15Y Old to 5Y old ratio at this point being at approx. 40% (the lowest we have seen is 30% during 2013 and the highest 60% during 2009) might be enticing enough to invest into an older asset and take advantage of a broader tanker market recovery in the near future. In other words, even older units can benefit in a market recovery.
As in the famous quote “A rising tide lifts all boats.”
By Timos Papadimitriou,
SnP Broker
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.
The Information contained within the website of COALspot.com is intended for informational purposes only and is not intended as professional counsel and should not be used as such.
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Saturday, 26 June 21
KOSPO INVITED BIDS FOR 480,000 MT OF COAL PER ANNUM
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 480,000 MT of NCV 1 Min. 5,600 (Spec 1) /Min. 5,0 ...
Thursday, 24 June 21
FEBRUARY'S INCREASE IN COAL-FIRED ELECTRIC GENERATION REDUCED U.S. COAL STOCKPILES - EIA
Coal stockpiles at U.S. power plants decreased significantly from December 2020 to February 2021, including a draw of nearly 16 million tons in Feb ...
Wednesday, 23 June 21
MARKET INSIGHT - INTERMODAL
The first half of 2021 has brought a very sharp and continued recovery in the dry bulk market and while many where expecting a relatively strong ma ...
Thursday, 17 June 21
2020 PROVED TO BE A TRULY TERRIBLE YEAR FOR GLOBAL SEABORNE COAL TRADE; CHINA'S COAL IMPORTS - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade.
Total global loadings in the 12 months of 2020 were down -12 ...
Thursday, 17 June 21
FITCH RATINGS RAISES SHORT-TERM OIL AND GAS PRICE ASSUMPTIONS
Fitch Ratings has increased its 2021 and 2022 oil price assumptions for the Brent and West Texas Intermediate (WTI) benchmarks due to stronger year ...
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- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- CIMB Investment Bank - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- GMR Energy Limited - India
- Marubeni Corporation - India
- Siam City Cement PLC, Thailand
- Attock Cement Pakistan Limited
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- TeaM Sual Corporation - Philippines
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Tata Chemicals Ltd - India
- India Bulls Power Limited - India
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sical Logistics Limited - India
- Cement Manufacturers Association - India
- The University of Queensland
- Makarim & Taira - Indonesia
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Videocon Industries ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Krishnapatnam Port Company Ltd. - India
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- Ministry of Finance - Indonesia
- Independent Power Producers Association of India
- Jindal Steel & Power Ltd - India
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Alfred C Toepfer International GmbH - Germany
- Posco Energy - South Korea
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Merrill Lynch Commodities Europe
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- MS Steel International - UAE
- Chettinad Cement Corporation Ltd - India
- Energy Link Ltd, New Zealand
- Therma Luzon, Inc, Philippines
- Ministry of Mines - Canada
- Dalmia Cement Bharat India
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Goldman Sachs - Singapore
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Miang Besar Coal Terminal - Indonesia
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Economic Council, Georgia
- McConnell Dowell - Australia
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Energy Development Corp, Philippines
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- White Energy Company Limited
- Georgia Ports Authority, United States
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Bulk Trading Sa - Switzerland
- Neyveli Lignite Corporation Ltd, - India
- Rio Tinto Coal - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- Star Paper Mills Limited - India
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Australian Coal Association
- Lanco Infratech Ltd - India
- Borneo Indobara - Indonesia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Indogreen Group - Indonesia
- Metalloyd Limited - United Kingdom
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Minerals Council of Australia
- GAC Shipping (India) Pvt Ltd
- Bhoruka Overseas - Indonesia
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- GVK Power & Infra Limited - India
- Central Java Power - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- Electricity Authority, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Standard Chartered Bank - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- PTC India Limited - India
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Romanian Commodities Exchange
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
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