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