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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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Tuesday, 01 June 21
BUMA PRODUCED 11.4 MILLION TONNES OF COAL IN 4Q 2020, 5% LOWER COMPARED TO 12.2 MILLION TONNES IN 4Q 2019
PT Delta Dunia Makmur Tbk. presents its newsletter with consolidated financial and operating results that include its primary and wholly-owne ...
Sunday, 30 May 21
PAKISTAN IS PLANNING TO END COAL IMPORTS, WORSENING OUTLOOK FOR SOUTH AFRICAN COAL - IEEFA
The growing and irreversible risks being faced by South African coal exporters
As Thungela Resources’ CEO attempts to talk up ...
Sunday, 30 May 21
G7 COAL FINANCE EXIT AND WHY IT MATTERS FOR INDIA - IEEFA
While India doesn’t rely on export credit finance to fund new coal plants, there are material implications
The commitment by the Group o ...
Saturday, 29 May 21
SKULD’S IMO 2020 SULPHUR CAP EXPERIENCE
More than a year has passed since the International Maritime Organization (IMO) mandate for the 0.50% sulphur cap for marine fuel (MARPOL Annex VI) ...
Thursday, 27 May 21
KOMIPO INVITED BIDS FOR 1.56 MILLION TONS OF BITUMINOUS COAL
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 ...
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- Holcim Trading Pte Ltd - Singapore
- Standard Chartered Bank - UAE
- Bayan Resources Tbk. - Indonesia
- Global Green Power PLC Corporation, Philippines
- Planning Commission, India
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Singapore Mercantile Exchange
- MS Steel International - UAE
- Kepco SPC Power Corporation, Philippines
- Thai Mozambique Logistica
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Electricity Generating Authority of Thailand
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vedanta Resources Plc - India
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Star Paper Mills Limited - India
- Meralco Power Generation, Philippines
- Deloitte Consulting - India
- The State Trading Corporation of India Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- PTC India Limited - India
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Barasentosa Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- Orica Mining Services - Indonesia
- Posco Energy - South Korea
- Eastern Coal Council - USA
- London Commodity Brokers - England
- Eastern Energy - Thailand
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Antam Resourcindo - Indonesia
- Medco Energi Mining Internasional
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Vizag Seaport Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Asmin Koalindo Tuhup - Indonesia
- GVK Power & Infra Limited - India
- Madhucon Powers Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Jaiprakash Power Ventures ltd
- Leighton Contractors Pty Ltd - Australia
- Independent Power Producers Association of India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Australian Coal Association
- PowerSource Philippines DevCo
- The University of Queensland
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Savvy Resources Ltd - HongKong
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- ASAPP Information Group - India
- Indonesian Coal Mining Association
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Indian Oil Corporation Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Pendopo Energi Batubara - Indonesia
- Rio Tinto Coal - Australia
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- SMC Global Power, Philippines
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Mercuria Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Tata Chemicals Ltd - India
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Edison Trading Spa - Italy
- Malabar Cements Ltd - India
- CIMB Investment Bank - Malaysia
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Jindal Steel & Power Ltd - India
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Pipit Mutiara Jaya. PT, Indonesia
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- TNB Fuel Sdn Bhd - Malaysia
- Coalindo Energy - Indonesia
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Kumho Petrochemical, South Korea
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- OPG Power Generation Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Chamber of Mines of South Africa
- Mjunction Services Limited - India
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Parliament of New Zealand
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
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