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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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- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Energy Development Corp, Philippines
- New Zealand Coal & Carbon
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Aboitiz Power Corporation - Philippines
- Ministry of Transport, Egypt
- Medco Energi Mining Internasional
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Mintek Dendrill Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Larsen & Toubro Limited - India
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Mercator Lines Limited - India
- Australian Coal Association
- Madhucon Powers Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Central Electricity Authority - India
- Meenaskhi Energy Private Limited - India
- Manunggal Multi Energi - Indonesia
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Eastern Coal Council - USA
- Karaikal Port Pvt Ltd - India
- Indian Oil Corporation Limited
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Baramulti Group, Indonesia
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Deloitte Consulting - India
- Australian Commodity Traders Exchange
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- The University of Queensland
- Independent Power Producers Association of India
- PTC India Limited - India
- Ministry of Mines - Canada
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Maharashtra Electricity Regulatory Commission - India
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Siam City Cement PLC, Thailand
- Vedanta Resources Plc - India
- Rashtriya Ispat Nigam Limited - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Electricity Generating Authority of Thailand
- Africa Commodities Group - South Africa
- Ceylon Electricity Board - Sri Lanka
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Krishnapatnam Port Company Ltd. - India
- Power Finance Corporation Ltd., India
- Bhatia International Limited - India
- CIMB Investment Bank - Malaysia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- TNB Fuel Sdn Bhd - Malaysia
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- The Treasury - Australian Government
- Chettinad Cement Corporation Ltd - India
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Aditya Birla Group - India
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Intertek Mineral Services - Indonesia
- Marubeni Corporation - India
- Sindya Power Generating Company Private Ltd
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Agrawal Coal Company - India
- CNBM International Corporation - China
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Heidelberg Cement - Germany
- Kepco SPC Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Jindal Steel & Power Ltd - India
- Lanco Infratech Ltd - India
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