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