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Wednesday, 24 February 16
THIRTEEN - NOT ALWAYS AN UNLUCKY NUMBER? - CLARKSONS
 Back in early 1999 the price of a 5 year old Panamax bulkcarrier dipped to $13.5m, and ever since analysts have hailed purchase decisions made at that time as some of the most lucrative shipping deals ever seen. Today, with the price back at $13m, perhaps it’s a good time to reflect on how successful investors were back in 1999 and whether there are similar opportunities once again.
What Was The Deal?
The graph shows for each year since 1990 the return that would have been generated by the purchase of a 5 year old Panamax bulkcarrier at the start of the year, the subsequent operation for ten years at the prevailing one year timecharter rate and then the sale of the unit at the end of that period as a 15 year old (for units purchased in 2007 and later, disposal at start 2016 was assumed). At the end of 1999 investors could pick up a 5 year old Panamax bulker for $14m. Trading that vessel at the start year one year timecharter rate for 10 years would have generated estimated earnings of $66.5m (after opex), and then as a 15 year old unit in 2009 the vessel could have been sold for $12.5m. That’s a small loss of $1.5m on the asset but still a total return of $65m, and an impressive internal rate of return (IRR) of 26%.
Playing Snap
A few years later, 5 year old Panamax bulkcarrier purchases did perhaps even better. Buying a 5 year old in 2002, once again at $14m, trading at the timecharter rate and selling as a 15 year old would have generated total returns of $73.2m and an IRR of 41%, whilst the equivalent project in 2003 would have generated $66.1m and an IRR of 44%. These vessels would have generated boom earnings earlier in the project period, subject to a heavier weighting in terms of the internal rate of return calculation.
Not Always A Good Hand
However, not all investors are so lucky. In this example, 5 year old ships purchased since 2008 (and sold this year, so admittedly with less time to hit upon a period of boom earnings) generated negative returns, and those purchased pre-1995 an average IRR of 7%. Buyers in 2008 would have lost a whopping $82.1m on the asset. Nevertheless, there was clearly a golden period; in the years 1998-2006 investors would have achieved an IRR ranging between 20% and 44%.
Unlucky (Or Lucky) 13?
So for those who have had the stomach to buy in at difficult times, there have been more than ample rewards. Today the price of a 5 year old Panamax is back at $13m. Dry bulk fundamentals, particularly on the demand side with the Chinese economy maturing, don’t look helpful at all (see SIW 1207), but with the 5 year old price at almost half that of a newbuild, who really knows what the longer-term opportunity might be?
Fortune favours the brave, but they also say that fools rush in. The outlook seems scary but investors might also have half an eye on their peers who invested at low points in the price cycle in the past. That’s the beauty of volatile and cyclical sectors, but it’s tricky food for thought for shipping investors. Are they willing to party like it’s 1999? Have a nice day.
Source: Clarksons
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Thursday, 07 April 16
PANAMAX RATES ARE FIRMING IN BOTH HEMISHEPHERES - FEARNLEYS
Capesize
With a great volume our of west Australia, rates were finally moving to upper 3's. and stabilizing towards the middle of the week in ...
Thursday, 07 April 16
BIMCO AND GIIGNL PUBLISH A GROUNDBREAKING VOYAGE CHARTER PARTY FOR LNG TRADE
BIMCO and the International Group of Liquefied Natural Gas Importers (GIIGNL) have today jointly issued the first definitive voyage charter party & ...
Wednesday, 06 April 16
HOW LONG SHIPPING CRISIS WILL BE; WHEN SHOULD OWNERS EXPECT THE BULK CARRIERS TO BECOME PROFITABLE? - INTERMODAL
It is the consensus that dry bulk shipping has been in a crisis for quite some time now. Bulk carrier values are at historical low levels, therefor ...
Tuesday, 05 April 16
DRY BULK REVISITS 1980S LOWS AND FACES UNCERTAIN LONGER TERM OUTLOOK - MSI | HELLENIC SHIPPING NEWS
With the market near bottom, attention is turning to the length of the downturn, the effect on asset values and the impact of broader demand side c ...
Monday, 04 April 16
THE LOADING, AND SUBSEQUENT DISCHARGE, OF UNSAFE NICKEL ORE - ALL TIME TO 'COUNT' - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
In a recent, published, London arbitration award the English tribunal has held that all time lost as a result of loading, ...
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Showing 2491 to 2495 news of total 6871 |
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- European Bulk Services B.V. - Netherlands
- Kaltim Prima Coal - Indonesia
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Pendopo Energi Batubara - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- Australian Commodity Traders Exchange
- Bukit Asam (Persero) Tbk - Indonesia
- Siam City Cement PLC, Thailand
- VISA Power Limited - India
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Parry Sugars Refinery, India
- Bhatia International Limited - India
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Transport, Egypt
- Thiess Contractors Indonesia
- Indonesian Coal Mining Association
- Barasentosa Lestari - Indonesia
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Energy Development Corp, Philippines
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Xindia Steels Limited - India
- Baramulti Group, Indonesia
- Larsen & Toubro Limited - India
- Simpson Spence & Young - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- New Zealand Coal & Carbon
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Mjunction Services Limited - India
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Indogreen Group - Indonesia
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Semirara Mining and Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- The Treasury - Australian Government
- Parliament of New Zealand
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- The University of Queensland
- Videocon Industries ltd - India
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Carbofer General Trading SA - India
- TeaM Sual Corporation - Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Minerals Council of Australia
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Ministry of Finance - Indonesia
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- CIMB Investment Bank - Malaysia
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Jaiprakash Power Ventures ltd
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Lanco Infratech Ltd - India
- Sojitz Corporation - Japan
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Standard Chartered Bank - UAE
- GMR Energy Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Miang Besar Coal Terminal - Indonesia
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- Renaissance Capital - South Africa
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Planning Commission, India
- Merrill Lynch Commodities Europe
- IHS Mccloskey Coal Group - USA
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- ASAPP Information Group - India
- Trasteel International SA, Italy
- Anglo American - United Kingdom
- Kideco Jaya Agung - Indonesia
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
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