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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, 01 December 23
COAL MINERS GROUP EXPECTS INDONESIA’S 2023 COAL OUTPUT TO SURPASS TARGET - REUTERS
The Indonesian Coal Mining Association (ICMA) expects the country’s 2023 coal output to surpass the official target of 695 million metric ton ...
Friday, 24 November 23
COAL IMPORTS TO INDIA IN OCTOBER 2023 REACHED HIGHEST LEVELS IN NEARLY A YEAR AND A HALF - VESSELSVALUE, VESON NAUTICAL
In October, coal imports to India reached 13.8 mt in October 2023, according to Oceanbolt, a Veson Nautical solution, the highest level since May 2 ...
Friday, 24 November 23
COAL SHIPMENTS TO ADVANCED ECONOMIES DOWN 17% SO FAR IN 2023 - BIMCO
In the first ten months of 2023, coal shipments to advanced economies fell by 17% y/y, as demand for electricity declined and the share of electric ...
Friday, 24 November 23
INTELLIGENT COAL MINES CONTRIBUTE TO IMPROVING SAFETY STANDARDS - CHINA DAILY
Mechanization, automation and intelligent upgrades have contributed to improved safety in coal mines, though the level of development of intelligen ...
Friday, 24 November 23
WHY AUSTRALIA'S COAL MINES ARE GETTING BIGGER - IEEFA
Australia’s largest coal mines are getting larger. Mines in New South Wales (NSW) are ramping up production following the state’s recov ...
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- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Georgia Ports Authority, United States
- Maheswari Brothers Coal Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Xindia Steels Limited - India
- Anglo American - United Kingdom
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Global Business Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Meenaskhi Energy Private Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ministry of Mines - Canada
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Minerals Council of Australia
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Samtan Co., Ltd - South Korea
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Kumho Petrochemical, South Korea
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Electricity Authority, New Zealand
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- CIMB Investment Bank - Malaysia
- Bahari Cakrawala Sebuku - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Bayan Resources Tbk. - Indonesia
- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Indian Energy Exchange, India
- Dalmia Cement Bharat India
- Kepco SPC Power Corporation, Philippines
- The Treasury - Australian Government
- Merrill Lynch Commodities Europe
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- ASAPP Information Group - India
- Tata Chemicals Ltd - India
- Straits Asia Resources Limited - Singapore
- Carbofer General Trading SA - India
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Kideco Jaya Agung - Indonesia
- Formosa Plastics Group - Taiwan
- Orica Australia Pty. Ltd.
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Interocean Group of Companies - India
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The University of Queensland
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Coal and Oil Company - UAE
- Bhoruka Overseas - Indonesia
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- Kapuas Tunggal Persada - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Therma Luzon, Inc, Philippines
- Power Finance Corporation Ltd., India
- Leighton Contractors Pty Ltd - Australia
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Siam City Cement PLC, Thailand
- Indo Tambangraya Megah - Indonesia
- Star Paper Mills Limited - India
- Lanco Infratech Ltd - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Energy Development Corp, Philippines
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indogreen Group - Indonesia
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Trasteel International SA, Italy
- Commonwealth Bank - Australia
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Central Java Power - Indonesia
- VISA Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Ind-Barath Power Infra Limited - India
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Goldman Sachs - Singapore
- Romanian Commodities Exchange
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Vedanta Resources Plc - India
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Salva Resources Pvt Ltd - India
- Parry Sugars Refinery, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Independent Power Producers Association of India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement - Thailand
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Mintek Dendrill Indonesia
- Grasim Industreis Ltd - India
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