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Thursday, 12 August 21
ONLY 3 VLCCS SOLD FOR DEMOLITION IN 2021 AS SECONDHAND PRICES TEMPT - BIMCO
 During the first seven months of 2021, only three actively trading Very Large Crude Carriers (VLCCs) have been sold for demolition. The current market for seaborne transportation of crude oil is weak and has caused freight rates to drop to multi-year lows. Despite this, crude oil tanker shipowners are not seizing the opportunity to reduce capacity and send less efficient units to the demolition yards.
The subdued demolition activity is seen at a time when steel prices offered in Bangladesh, India, and Pakistan – the world’s top ship demolition locations – are at an all-time high. The price of steel from ship demolition is supported by high steel prices in general as well as the limited number of ships heading for demolition.
In addition to the three actively trading VLCCs demolished in the first seven months of the year, five retired VLCCs working as Floating Storage and Offloading units (FSOs) in recent years have been demolished.
However, as they are not actively trading, the demolition of these five VLCC (FSO)s does not affect the demand-supply imbalance, i.e., the freight rates. The average age of the scrapped VLCCs used as FSOs is 24 years while the average age for the three actively trading VLCCs is 22 years.
Owners take advantage of an attractive secondhand market
The lethargic pace of VLCC demolition is also explained by attractive prices for older ships in the secondhand market. According to VesselsValue, 69 VLCCs have changed hands in the Jan-July 2021 period, compared with 91 for the full year of 2020.
To some extent, what we see now is like what we saw in the period that followed the six quarters of high oil tanker earnings from Q4 2014 through Q1 2016. Following this it was not until Q3 2017 that we began to see a pick-up in demolition for VLCCs.
Time has proven that it takes time for shipowners’ demolition decision to mature, and that a weak market right in the wake of a strong one is not enough to take the final step and go for demolition.
“The low demolition level seen in the first seven months of the year for crude oil tankers surely takes some by surprise. Some are wondering why shipowners are not demolishing the excess fleet when freight rates have been sluggish for the past year,” says Peter Sand, BIMCO’s Chief Shipping Analyst.
“The reason behind this is two-fold. Firstly, the strong earnings enjoyed by everyone in the crude oil tanker shipping sector last year leaves no owner short of cash. Secondly, as secondhand prices exceed even the record-high prices offered for demolition steel, shipowners are more inclined to keep their tankers afloat and changing hands, rather than sending them to the demolition yards,” says Sand, adding:
“Yet, nothing is straightforward as oil product tankers, on the other hand are heading for a record-high level of fleet demolition in 2021.”
Source: BIMCO, By Peter Sand, Chief Shipping Analyst
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Wednesday, 13 October 21
MARKET INSIGHT - INTERMODAL
Following up on our insight on May 2021, where we discussed about the Capesize market outlook for the second half of the year, we are pleased to se ...
Wednesday, 13 October 21
FBX INDEX: THE IMPOSSIBILITY OF SHORT-TERM FORECASTING - LARS JENSEN
Will freight rates on Asia-Europe or the Transpacific reach 40.000 USD/FFE in the run-up prior to Chinese New Year 2022? Or will they start droppin ...
Wednesday, 13 October 21
CHINA FLOODS: COAL PRICE HITS FRESH HIGH AS MINES SHUT - BBC
The price of coal used in China’s power plants has surged to a new record high as another of the country’s key mining regions is hit by ...
Tuesday, 12 October 21
BUMA SIGNS CONDITIONAL AGREEMENT FOR AUSTRALIAN ASSET ACQUISITION
PT Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama, through its newly incorporated Australian subsidiary, BUMA International Pty ...
Tuesday, 12 October 21
INDONESIA'S COAL-BASED POWER PLANTS ARE SUBJECT TO CARBON TAX NEXT YEAR, ELECTRICITY COSTS COULD RISE! - CNBC
The Indonesian government is planning plans to implement a carbon tax of IDR 30 per kilogram (kg) of carbon dioxide equivalent (CO2e) or equivalent ...
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- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- The University of Queensland
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Tamil Nadu electricity Board
- Bukit Asam (Persero) Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Xindia Steels Limited - India
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Indian Energy Exchange, India
- Kalimantan Lumbung Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Malabar Cements Ltd - India
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Renaissance Capital - South Africa
- Electricity Generating Authority of Thailand
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Wood Mackenzie - Singapore
- Marubeni Corporation - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Trasteel International SA, Italy
- Intertek Mineral Services - Indonesia
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- Ind-Barath Power Infra Limited - India
- Indika Energy - Indonesia
- Parliament of New Zealand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- Eastern Coal Council - USA
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Makarim & Taira - Indonesia
- CIMB Investment Bank - Malaysia
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- PTC India Limited - India
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- The Treasury - Australian Government
- IHS Mccloskey Coal Group - USA
- Bhatia International Limited - India
- Carbofer General Trading SA - India
- Mercuria Energy - Indonesia
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Agrawal Coal Company - India
- GVK Power & Infra Limited - India
- Thiess Contractors Indonesia
- GMR Energy Limited - India
- Economic Council, Georgia
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- Thai Mozambique Logistica
- Sojitz Corporation - Japan
- Lanco Infratech Ltd - India
- Parry Sugars Refinery, India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Samtan Co., Ltd - South Korea
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Larsen & Toubro Limited - India
- Madhucon Powers Ltd - India
- Indogreen Group - Indonesia
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- Coal and Oil Company - UAE
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- Salva Resources Pvt Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Chettinad Cement Corporation Ltd - India
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- Australian Coal Association
- Bukit Makmur.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Directorate Of Revenue Intelligence - India
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
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