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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, 10 March 16
IT FEELS SAFE TO SAY THAT THE MARKET IS SLOWLY AND PAINFULLY REGAINING ITS BALANCE
With the BDI marking its third consecutive positive weekly closing, it feels safe to say that the market is regaining its balance; slowly and painf ...
Wednesday, 09 March 16
U.S. COAL EXPORTS DECLINED 24% (74 MMST) IN 2015; COAL PRODUCTION IS EXPECTED TO DECREASE BY 111 MMST IN 2016 - EIA
U.S. Coal Supply
EIA estimates that U.S. coal production for February 2016 was 54 million short tons (MMst), a 4 MMst (7%) decrease from the prev ...
Wednesday, 09 March 16
RI MAY HAVE TO IMPORT COAL FOR FUTURE POWER PLANTS: STUDY - THE JAKARTA POST
With coal prices continuing to decline, Indonesia will struggle to provide the coal needed to fire up its power stations in the near future, a stud ...
Tuesday, 08 March 16
INDONESIA HIKES COAL BENCHMARK PRICE FOR THE FIRST TIME IN 12 MONTHS
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016, but up slightly in Mar ...
Tuesday, 08 March 16
THE DRY CARGO MARKET ENDURED ONE OF ITS MOST DIFFICULT YEARS IN 2015, EXPERIENCING LOWS NOT SEEN SINCE THE MID 1980S - CLARKSONS
Whilst shipping and offshore markets have seen some good opportunities during 2015, overall there have been unprecedented challenges, so we are ver ...
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Showing 2531 to 2535 news of total 6871 |
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- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- Coalindo Energy - Indonesia
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Makarim & Taira - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Energy Link Ltd, New Zealand
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Thai Mozambique Logistica
- Indika Energy - Indonesia
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- PTC India Limited - India
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Wilmar Investment Holdings
- MS Steel International - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Wood Mackenzie - Singapore
- LBH Netherlands Bv - Netherlands
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- GAC Shipping (India) Pvt Ltd
- Thiess Contractors Indonesia
- Global Coal Blending Company Limited - Australia
- Barasentosa Lestari - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Indonesian Coal Mining Association
- Semirara Mining and Power Corporation, Philippines
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Australian Coal Association
- Mercator Lines Limited - India
- ASAPP Information Group - India
- Central Java Power - Indonesia
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indogreen Group - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Global Business Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Vedanta Resources Plc - India
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Sree Jayajothi Cements Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Baramulti Group, Indonesia
- Kepco SPC Power Corporation, Philippines
- VISA Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- CIMB Investment Bank - Malaysia
- Gujarat Electricity Regulatory Commission - India
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Essar Steel Hazira Ltd - India
- Planning Commission, India
- Indian Oil Corporation Limited
- Xindia Steels Limited - India
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- Leighton Contractors Pty Ltd - Australia
- OPG Power Generation Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Siam City Cement - Thailand
- Singapore Mercantile Exchange
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ministry of Transport, Egypt
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Latin American Coal - Colombia
- Sinarmas Energy and Mining - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- ICICI Bank Limited - India
- London Commodity Brokers - England
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Australian Commodity Traders Exchange
- Banpu Public Company Limited - Thailand
- Directorate General of MIneral and Coal - Indonesia
- Parry Sugars Refinery, India
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Maharashtra Electricity Regulatory Commission - India
- Minerals Council of Australia
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Toyota Tsusho Corporation, Japan
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Bayan Resources Tbk. - Indonesia
- Madhucon Powers Ltd - India
- Metalloyd Limited - United Kingdom
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Ceylon Electricity Board - Sri Lanka
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Ind-Barath Power Infra Limited - India
- Economic Council, Georgia
- IHS Mccloskey Coal Group - USA
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