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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.
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Thursday, 10 June 21
INDONESIA COAL EARNINGS RECOVERY TO SLOW AFTER STRONG 1Q - FITCH RATINGS
Fitch Ratings expects the recovery in operating and financial performance of Indonesian coal miners and coal contractors to slow during rest of 202 ...
Thursday, 10 June 21
U.S. COAL PRODUCTION TO TOTAL 600 MMST IN 2021, 11% MORE THAN IN 2020 - EIA
EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020.
The increase is dri ...
Wednesday, 09 June 21
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
The In-Person Maritime Event
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
culminates successfully in Dubai
Press Release: ...
Saturday, 05 June 21
KOMIPO INVITED 5600 NAR COAL OFFERS FOR THREE YEARS SUPPLY; 520,000 MT PER YEAR
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Saturday, 05 June 21
IT'S TIME FOR THE BIDEN ADMINISTRATION TO CHAMPION RENEWABLE ENERGY IN THE PHILIPPINES, NOT NUCLEAR OR FOSSIL GAS - IEEFA
Fossil gas and nuclear investments risk locking in costly, outdated infrastructure for the long-term
The United States has spent the ...
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- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- GVK Power & Infra Limited - India
- McConnell Dowell - Australia
- Deloitte Consulting - India
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Kaltim Prima Coal - Indonesia
- PTC India Limited - India
- Thiess Contractors Indonesia
- Tamil Nadu electricity Board
- Interocean Group of Companies - India
- Simpson Spence & Young - Indonesia
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Ministry of Finance - Indonesia
- Coalindo Energy - Indonesia
- Riau Bara Harum - Indonesia
- Energy Development Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Antam Resourcindo - Indonesia
- IEA Clean Coal Centre - UK
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Star Paper Mills Limited - India
- Holcim Trading Pte Ltd - Singapore
- Samtan Co., Ltd - South Korea
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Medco Energi Mining Internasional
- Kepco SPC Power Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- South Luzon Thermal Energy Corporation
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Borneo Indobara - Indonesia
- Indian Energy Exchange, India
- Global Business Power Corporation, Philippines
- Thai Mozambique Logistica
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Dalmia Cement Bharat India
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Australian Commodity Traders Exchange
- Ministry of Mines - Canada
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement PLC, Thailand
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Alfred C Toepfer International GmbH - Germany
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Orica Mining Services - Indonesia
- Sakthi Sugars Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Planning Commission, India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate Of Revenue Intelligence - India
- The State Trading Corporation of India Ltd
- Merrill Lynch Commodities Europe
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Sojitz Corporation - Japan
- Jindal Steel & Power Ltd - India
- Indian Oil Corporation Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Latin American Coal - Colombia
- VISA Power Limited - India
- Mjunction Services Limited - India
- CNBM International Corporation - China
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- The University of Queensland
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Maheswari Brothers Coal Limited - India
- Semirara Mining Corp, Philippines
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- Indika Energy - Indonesia
- Karaikal Port Pvt Ltd - India
- Australian Coal Association
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Indogreen Group - Indonesia
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Global Green Power PLC Corporation, Philippines
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- Therma Luzon, Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- AsiaOL BioFuels Corp., Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Banpu Public Company Limited - Thailand
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