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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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Friday, 04 June 21
NEW COAL-FIRED POWER PLANTS IN INDIA WILL BE ECONOMICALLY UNVIABLE - IEEFA
Coal capacity additions face major stranded asset risk
Much of India’s 33 gigawatts (GW) of coal-fired power capacity currently under co ...
Thursday, 03 June 21
JUNE HBA IS HITTING ABOVE $100 AND SETTLED AT ITS HIGHEST SINCE OCTOBER 2020
COALspot.com: The Indonesia coal price reference for June 2021 settles at US$ 100.33 per ton FOB vessel.
The Indonesia coal pr ...
Wednesday, 02 June 21
INDONESIA RV WAS DOWN TO LOW/MID $20,000S DAY FOR PANAMAX/KAMSARMAX WITH DELIVERY S CHINA - BANCHERO COSTA
Panamax
A softening week in the Pacific basin with rates under a downward pressure mainly caused by the oversupply of tonnage in the area, said ...
Wednesday, 02 June 21
EUROPEAN UNION'S IRON ORE IMPORTS - BANCHERO COSTA
The European Union (27) is currently the fourth largest importer of iron ore in the world, after China, Japan, and South Korea.
Euro ...
Tuesday, 01 June 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.02 PCT - XINHUA
China Taiyuan coal transaction price index stood at 160.06 points Monday, down 0.02 percent week on week.
The index, released by Chi ...
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- PNOC Exploration Corporation - Philippines
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Central Electricity Authority - India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Miang Besar Coal Terminal - Indonesia
- Parry Sugars Refinery, India
- Manunggal Multi Energi - Indonesia
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- White Energy Company Limited
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Thai Mozambique Logistica
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- Tamil Nadu electricity Board
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- Borneo Indobara - Indonesia
- Romanian Commodities Exchange
- Kaltim Prima Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indonesian Coal Mining Association
- Toyota Tsusho Corporation, Japan
- Videocon Industries ltd - India
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Semirara Mining Corp, Philippines
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Minerals Council of Australia
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Leighton Contractors Pty Ltd - Australia
- IEA Clean Coal Centre - UK
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Rashtriya Ispat Nigam Limited - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- ASAPP Information Group - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- IHS Mccloskey Coal Group - USA
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Eastern Coal Council - USA
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Star Paper Mills Limited - India
- European Bulk Services B.V. - Netherlands
- GMR Energy Limited - India
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMC Global Power, Philippines
- Chamber of Mines of South Africa
- Alfred C Toepfer International GmbH - Germany
- Carbofer General Trading SA - India
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Agrawal Coal Company - India
- Deloitte Consulting - India
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Edison Trading Spa - Italy
- Sarangani Energy Corporation, Philippines
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Jindal Steel & Power Ltd - India
- GAC Shipping (India) Pvt Ltd
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Petrochimia International Co. Ltd.- Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- International Coal Ventures Pvt Ltd - India
- Ambuja Cements Ltd - India
- Aditya Birla Group - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- Latin American Coal - Colombia
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Marubeni Corporation - India
- Indika Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Coalindo Energy - Indonesia
- Power Finance Corporation Ltd., India
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Vedanta Resources Plc - India
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- Metalloyd Limited - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Makarim & Taira - Indonesia
- Electricity Generating Authority of Thailand
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- PTC India Limited - India
- Attock Cement Pakistan Limited
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