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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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Wednesday, 22 November 23
INDIA: GOVERNMENT PLANS 1.4 BILLION TONNE COAL OUTPUT BY 2027 - LIVEMINT
The Union coal ministry on Monday announced plans to increase India’s coal production to 1.404 billion tonne by 2027, with an eye to further ...
Wednesday, 22 November 23
OBLIGATION. INDONESIA AIMS TO START COLLECTING LEVIES FROM COAL MINERS IN JANUARY - REUTERS
Indonesia plans to start collecting levies from coal miners in January to be used to compensate miners who sell coal to the state utility at lower ...
Tuesday, 21 November 23
INDIAN COAL POWER PLANTS’ CAPACITY UTILISATION WILL IMPROVE TO 65% THIS FISCAL: - CRISIL
Coal-based thermal power units’ plant load factor (PLF) or capacity utilisation will improve to 65 percent in the current fiscal year despite ...
Tuesday, 14 November 23
CAPITAL PRODUCT PARTNERS L.P. ANNOUNCES TRANSFORMATIVE TRANSACTION INCLUDING THE ACQUISITION OF 11 NEWBUILD LNG CARRIERS FOR $3.1 BILLION
Capital Product Partners L.P. announced that it has entered into an umbrella agreement (the “Umbrella Agreement”) with Capital Maritime ...
Tuesday, 14 November 23
COAL INDIA BEATS Q2 PROFIT VIEW ON HIGH POWER DEMAND AMID WEAK MONSOON - REUTERS
Coal India on Friday reported better-than-expected second-quarter profit, helped by high power demand and boosted production amid a weak monsoon.
...
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- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- Salva Resources Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Renaissance Capital - South Africa
- Essar Steel Hazira Ltd - India
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- VISA Power Limited - India
- Medco Energi Mining Internasional
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Kideco Jaya Agung - Indonesia
- Coastal Gujarat Power Limited - India
- Romanian Commodities Exchange
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- London Commodity Brokers - England
- Videocon Industries ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Orica Australia Pty. Ltd.
- The Treasury - Australian Government
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- San Jose City I Power Corp, Philippines
- Altura Mining Limited, Indonesia
- Merrill Lynch Commodities Europe
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kapuas Tunggal Persada - Indonesia
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Ministry of Mines - Canada
- GN Power Mariveles Coal Plant, Philippines
- Latin American Coal - Colombia
- Australian Coal Association
- Makarim & Taira - Indonesia
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- Parry Sugars Refinery, India
- Electricity Authority, New Zealand
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- Ministry of Finance - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bhatia International Limited - India
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Mjunction Services Limited - India
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Interocean Group of Companies - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Kohat Cement Company Ltd. - Pakistan
- Wood Mackenzie - Singapore
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- MS Steel International - UAE
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Mintek Dendrill Indonesia
- Krishnapatnam Port Company Ltd. - India
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Economic Council, Georgia
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Indonesian Coal Mining Association
- Kumho Petrochemical, South Korea
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Sarangani Energy Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Eastern Energy - Thailand
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