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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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Tuesday, 15 March 16
PORT OF NEWCASTLE SHIPPED 12.78 MMT OF COAL IN FEBRUARY 2016
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped AU$1,110.5 mi ...
Tuesday, 15 March 16
ADARO ENERGY LOWERED ITS COAL CASH COST BY 16% TO US$ 27.98 PER TONE IN 2015
Difficult Coal Market Condition Persists in 2015, Adaro Lowers Costs, Reduces Capital Spending and Maintains Solid Liquidity.
PT Adaro E ...
Monday, 14 March 16
THE CS 50 INDEX ROSE $0.16 OR, 0.41% TO $38.82 A TON
COALspot.com: Average 5000 GAR coal index of Indonesian origin rose 0.41 percent week over week to averaging $38.82 per ton on this past Friday, ac ...
Monday, 14 March 16
THE BALTIC EXCHANGE CONTINUED TO ROSE THIS PAST WEEK
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities continued to rise this week helped by higher rates for pa ...
Saturday, 12 March 16
PLN, COAL COMPANIES IN TALKS ABOUT PRICES - THE JAKARTA POST
Following a study that predicted that Indonesia would struggle to provide coal for its power stations in the near future, the government will facil ...
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Showing 2521 to 2525 news of total 6871 |
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- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Kartika Selabumi Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Mercator Lines Limited - India
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- Coastal Gujarat Power Limited - India
- Chamber of Mines of South Africa
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Intertek Mineral Services - Indonesia
- Riau Bara Harum - Indonesia
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Meralco Power Generation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Cement Manufacturers Association - India
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Minerals Council of Australia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- Gujarat Mineral Development Corp Ltd - India
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Madhucon Powers Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Essar Steel Hazira Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Renaissance Capital - South Africa
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- The State Trading Corporation of India Ltd
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- ASAPP Information Group - India
- Latin American Coal - Colombia
- Metalloyd Limited - United Kingdom
- Sical Logistics Limited - India
- Thiess Contractors Indonesia
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Toyota Tsusho Corporation, Japan
- Energy Development Corp, Philippines
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- GAC Shipping (India) Pvt Ltd
- India Bulls Power Limited - India
- Wilmar Investment Holdings
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- The University of Queensland
- Mintek Dendrill Indonesia
- Australian Coal Association
- London Commodity Brokers - England
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- MS Steel International - UAE
- Antam Resourcindo - Indonesia
- Economic Council, Georgia
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Medco Energi Mining Internasional
- Kumho Petrochemical, South Korea
- Tata Chemicals Ltd - India
- Goldman Sachs - Singapore
- Rio Tinto Coal - Australia
- Bhoruka Overseas - Indonesia
- ICICI Bank Limited - India
- GMR Energy Limited - India
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Sindya Power Generating Company Private Ltd
- Makarim & Taira - Indonesia
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Bukit Baiduri Energy - Indonesia
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Parliament of New Zealand
- Kalimantan Lumbung Energi - Indonesia
- Maheswari Brothers Coal Limited - India
- Carbofer General Trading SA - India
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Sojitz Corporation - Japan
- Iligan Light & Power Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Dalmia Cement Bharat India
- Gujarat Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- Planning Commission, India
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- Savvy Resources Ltd - HongKong
- Maharashtra Electricity Regulatory Commission - India
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