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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, 31 March 16
CAPE: ANOTHER UNEVENTFUL WEEK WITH FIXTURES CONCLUDED AT LAST DONE LEVELS - FEARNLEYS
Cape
Another uneventful week with fixtures concluded at last done levels, CS levels remain around the USD 3 mark, whilst C3 is still just short o ...
Wednesday, 30 March 16
MINISTRY OF ENERGY AND MINERAL RESOURCES OF INDONESIA TO REVISE METHODOLOGY TO DETERMINE THE SELLING PRICE OF COAL TO MINE-MOUTH POWER PLANTS
COALspot.com: Ministry of Energy and Mineral Resources (ESDM) of Indonesia to review to revise methodology to determine the selling price of co ...
Wednesday, 30 March 16
VALEMAXES: THE BIGGEST NIGHTMARE OF TODAY'S DRY BULK MARKET - INTERMODAL
At a time that Europe is still dealing with the aftermath of the terrorist attacks in Brussels our society is daily bombarded with news of terroris ...
Tuesday, 29 March 16
BULK CARRIER VENTILATION - CAPTAIN PAUL R. WALTON
KNOWLEDGE TO ELEVATE
Moisture damage is a source of many cargo claims. Claimants allege that it is brought about by the ship’s failure t ...
Monday, 28 March 16
INDONESIAN WEEKLY CS50 COAL INDEX CLOSED SLIGHTLY FIRM; CS 57 INDEX CLOSED WEAK
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.03 percent week over week to averaging $38.91 per ton on this past Thursday, ...
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Showing 2501 to 2505 news of total 6871 |
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- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- MS Steel International - UAE
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Agrawal Coal Company - India
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Eastern Coal Council - USA
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Uttam Galva Steels Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Port Waratah Coal Services - Australia
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Toyota Tsusho Corporation, Japan
- Formosa Plastics Group - Taiwan
- Sindya Power Generating Company Private Ltd
- Baramulti Group, Indonesia
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Wood Mackenzie - Singapore
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Energy Link Ltd, New Zealand
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Planning Commission, India
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Bangladesh Power Developement Board
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Kumho Petrochemical, South Korea
- ASAPP Information Group - India
- Independent Power Producers Association of India
- Ministry of Transport, Egypt
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- Bayan Resources Tbk. - Indonesia
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Goldman Sachs - Singapore
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- Sojitz Corporation - Japan
- Bahari Cakrawala Sebuku - Indonesia
- Ind-Barath Power Infra Limited - India
- Ambuja Cements Ltd - India
- Oldendorff Carriers - Singapore
- Petron Corporation, Philippines
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Videocon Industries ltd - India
- Indonesian Coal Mining Association
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Marubeni Corporation - India
- Mercuria Energy - Indonesia
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- PTC India Limited - India
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Chamber of Mines of South Africa
- AsiaOL BioFuels Corp., Philippines
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- European Bulk Services B.V. - Netherlands
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Africa Commodities Group - South Africa
- Bhoruka Overseas - Indonesia
- TeaM Sual Corporation - Philippines
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Renaissance Capital - South Africa
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- The University of Queensland
- Electricity Generating Authority of Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kobexindo Tractors - Indoneisa
- Jaiprakash Power Ventures ltd
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Makarim & Taira - Indonesia
- Madhucon Powers Ltd - India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Timah Investasi Mineral - Indoneisa
- Georgia Ports Authority, United States
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Salva Resources Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Eastern Energy - Thailand
- VISA Power Limited - India
- Minerals Council of Australia
- Bhatia International Limited - India
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Romanian Commodities Exchange
- Neyveli Lignite Corporation Ltd, - India
- Ministry of Finance - Indonesia
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Singapore Mercantile Exchange
- Sree Jayajothi Cements Limited - India
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Deloitte Consulting - India
- IHS Mccloskey Coal Group - USA
- Kapuas Tunggal Persada - Indonesia
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Therma Luzon, Inc, Philippines
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- London Commodity Brokers - England
- Bukit Asam (Persero) Tbk - Indonesia
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Chettinad Cement Corporation Ltd - India
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