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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, 24 March 16
NEWBUILDINGS' PRICES HAVE STARTED TO COME DOWN - ALLIED | HELLENIC SHIPPING NEWS
Newbuildings’ prices have started to come down, as demand has remained subdued for quite some time now. In its latest weekly report, shipbrok ...
Wednesday, 23 March 16
THE PANAMA CANAL - WILL THE MELTING OF POLAR ICE CAPS CREATE RIVAL NAVIGATIONAL WATERWAYS THROUGH THE ARCTIC? - INTERMODAL
The Panama Canal, 102 years after its initial opening, is now about to have its expansion completed with a cost of USD5.25 Billion. It is a project ...
Tuesday, 22 March 16
FOUR NEW MARKET MEMBERS HAVE JOINED GLOBALCOAL
globalCOAL® announced yesterday that four new Market Members have joined its international trading community.
Ferrocadia DMCC is an intern ...
Monday, 21 March 16
INDONESIAN 4200 GAR COAL INDEX ROSE $0.12 OR, 0.44% WEEK OVER WEEK; INDEX CLOASED AT $27.19 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.21 percent week over week to averaging $38.90 per ton on this past Friday, ac ...
Monday, 21 March 16
THE BALTIC DRY INDEX ROSE SLIGHTLY WEEK OVER WEEK; BCI UP 11.93%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued rose this week helped by higher rates for Cape ...
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Showing 2511 to 2515 news of total 6871 |
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- Manunggal Multi Energi - Indonesia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Dalmia Cement Bharat India
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Barasentosa Lestari - Indonesia
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Ministry of Finance - Indonesia
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Sical Logistics Limited - India
- Chettinad Cement Corporation Ltd - India
- Romanian Commodities Exchange
- SMC Global Power, Philippines
- SMG Consultants - Indonesia
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Videocon Industries ltd - India
- Grasim Industreis Ltd - India
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Oldendorff Carriers - Singapore
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- Tamil Nadu electricity Board
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Savvy Resources Ltd - HongKong
- The University of Queensland
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Bayan Resources Tbk. - Indonesia
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Gujarat Sidhee Cement - India
- Billiton Holdings Pty Ltd - Australia
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- Chamber of Mines of South Africa
- Indika Energy - Indonesia
- The State Trading Corporation of India Ltd
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Jaiprakash Power Ventures ltd
- Cement Manufacturers Association - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Parliament of New Zealand
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Indian Oil Corporation Limited
- The Treasury - Australian Government
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sarangani Energy Corporation, Philippines
- Energy Link Ltd, New Zealand
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Coalindo Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Salva Resources Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Bharathi Cement Corporation - India
- Kideco Jaya Agung - Indonesia
- Bhatia International Limited - India
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Binh Thuan Hamico - Vietnam
- Attock Cement Pakistan Limited
- London Commodity Brokers - England
- Trasteel International SA, Italy
- Bahari Cakrawala Sebuku - Indonesia
- Carbofer General Trading SA - India
- Directorate Of Revenue Intelligence - India
- Straits Asia Resources Limited - Singapore
- Mintek Dendrill Indonesia
- Karaikal Port Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Aditya Birla Group - India
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Madhucon Powers Ltd - India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Bukit Asam (Persero) Tbk - Indonesia
- Planning Commission, India
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Interocean Group of Companies - India
- Formosa Plastics Group - Taiwan
- Petron Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Deloitte Consulting - India
- Energy Development Corp, Philippines
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- ASAPP Information Group - India
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- GMR Energy Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Wood Mackenzie - Singapore
- Electricity Generating Authority of Thailand
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- Australian Commodity Traders Exchange
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Africa Commodities Group - South Africa
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
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