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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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Friday, 11 March 16
ADANI GLOBAL BAGS 0.26 MILLION TONS OF COAL CONTRACT FROM LANKA COAL COMPANY
COALspot.com: Lanka Coal Company (Private) Limited, Sri Lanka has awarded 260,000 +/- 10% tons of Power plant 6300 GAR calorific value coal to Adan ...
Friday, 11 March 16
US WEEKLY COAL PRODUCTION DOWN BY 0.5 MMST
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 12.6 million shor ...
Friday, 11 March 16
FORTESCUE'S MOU WITH VALE COULD STRENGTHEN ITS BUSINESS PROFILE - FITCH
COALspot.com: Fitch Ratings says that Australia-based Fortescue Metals Group Limited's (BB+/Negative) memorandum of understanding (MOU) with Br ...
Thursday, 10 March 16
CHINA'S NEW POLICY PLAN COULD BE POSITIVE FOR SHIPPING, BUT TARGETS SEEM RATHER AMBITIOUS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
China set out its new policy plan during the course of the past weekend, but it seems to have set some very ambitious goals, which could be difficu ...
Thursday, 10 March 16
U.S. COAL EXPORTS DECLINED 23% IN 2015, AS COAL IMPORTS REMAINED STEADY
COALspot.com: The United States remains a net exporter of coal, exporting 74.0 million short tons (MMst) and importing 11 MMst in 2015.
Accord ...
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Showing 2526 to 2530 news of total 6871 |
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- Gujarat Sidhee Cement - India
- Krishnapatnam Port Company Ltd. - India
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Parliament of New Zealand
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sree Jayajothi Cements Limited - India
- Rio Tinto Coal - Australia
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Intertek Mineral Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Edison Trading Spa - Italy
- Goldman Sachs - Singapore
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Siam City Cement - Thailand
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- PNOC Exploration Corporation - Philippines
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Semirara Mining and Power Corporation, Philippines
- Riau Bara Harum - Indonesia
- Metalloyd Limited - United Kingdom
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Formosa Plastics Group - Taiwan
- Coastal Gujarat Power Limited - India
- Borneo Indobara - Indonesia
- Samtan Co., Ltd - South Korea
- Kumho Petrochemical, South Korea
- Indo Tambangraya Megah - Indonesia
- Interocean Group of Companies - India
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Sojitz Corporation - Japan
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Vedanta Resources Plc - India
- Merrill Lynch Commodities Europe
- Banpu Public Company Limited - Thailand
- Attock Cement Pakistan Limited
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Thiess Contractors Indonesia
- SMC Global Power, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Indonesian Coal Mining Association
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Minerals Council of Australia
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Renaissance Capital - South Africa
- Anglo American - United Kingdom
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- GAC Shipping (India) Pvt Ltd
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Wood Mackenzie - Singapore
- Carbofer General Trading SA - India
- Global Green Power PLC Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bayan Resources Tbk. - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Alfred C Toepfer International GmbH - Germany
- Ambuja Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Eastern Energy - Thailand
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Sarangani Energy Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Electricity Generating Authority of Thailand
- CNBM International Corporation - China
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Star Paper Mills Limited - India
- Binh Thuan Hamico - Vietnam
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Siam City Cement PLC, Thailand
- Australian Coal Association
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Maharashtra Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Eastern Coal Council - USA
- Bhoruka Overseas - Indonesia
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Bhushan Steel Limited - India
- Mjunction Services Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- AsiaOL BioFuels Corp., Philippines
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parry Sugars Refinery, India
- Bharathi Cement Corporation - India
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- Essar Steel Hazira Ltd - India
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- The University of Queensland
- Marubeni Corporation - India
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
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