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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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Monday, 07 March 16
INDONESIAN 5700 GAR COAL INDEX DECLINE $0.05 A TON WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.28 percent week over week to averaging $38.66 per ton on this past Friday, ...
Monday, 07 March 16
FREIGHT MARKET MOVING POSITIVE; ALL SEGMENTS EXCEPT CAPE SHOWING A FIRM TREND
COALspot.com: The freight market was steady this past week and showing a firm trend for all segments except for Cape index.
The Baltic Dry Ind ...
Friday, 04 March 16
GLOBAL ECONOMY'S JITTERS ARE SLOWING DOWN SHIPPING EVEN FURTHER - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The global economy’s shaky condition to say the least is now hampering growth and as a result demand for shipping is slowing down, something ...
Friday, 04 March 16
U.S. YEAR-TO-DATE COAL PRODUCTION TOTALED 109.3 MMST; 30.2% LOWER THAN THE COMPARABLE YEAR-TO-DATE COAL PRODUCTION IN 2015 - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 13.1 million shor ...
Thursday, 03 March 16
INDIA'S BUDGET NOT ENOUGH TO BOOST STEELMAKERS' PROFITABILITY - FITCH RATINGS
COALspot.com: Fitch Ratings says that increase in proposed infrastructure spending in India's latest government budget is unlikely to provide a ...
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Showing 2536 to 2540 news of total 6871 |
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- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhushan Steel Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Authority, New Zealand
- Energy Link Ltd, New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Orica Australia Pty. Ltd.
- Alfred C Toepfer International GmbH - Germany
- Timah Investasi Mineral - Indoneisa
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Miang Besar Coal Terminal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Riau Bara Harum - Indonesia
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- GAC Shipping (India) Pvt Ltd
- Eastern Energy - Thailand
- Aboitiz Power Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Edison Trading Spa - Italy
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Eastern Coal Council - USA
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Globalindo Alam Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- McConnell Dowell - Australia
- Price Waterhouse Coopers - Russia
- Jorong Barutama Greston.PT - Indonesia
- Kobexindo Tractors - Indoneisa
- Siam City Cement - Thailand
- White Energy Company Limited
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Wilmar Investment Holdings
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Independent Power Producers Association of India
- India Bulls Power Limited - India
- Sree Jayajothi Cements Limited - India
- Merrill Lynch Commodities Europe
- Dalmia Cement Bharat India
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- OPG Power Generation Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Gujarat Mineral Development Corp Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Commonwealth Bank - Australia
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- VISA Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Bulk Trading Sa - Switzerland
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Posco Energy - South Korea
- Australian Coal Association
- SMC Global Power, Philippines
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Altura Mining Limited, Indonesia
- Banpu Public Company Limited - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- The State Trading Corporation of India Ltd
- Gujarat Sidhee Cement - India
- Agrawal Coal Company - India
- Directorate General of MIneral and Coal - Indonesia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Formosa Plastics Group - Taiwan
- Uttam Galva Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- IEA Clean Coal Centre - UK
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Lanco Infratech Ltd - India
- Central Java Power - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Indo Tambangraya Megah - Indonesia
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Bukit Makmur.PT - Indonesia
- Antam Resourcindo - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Anglo American - United Kingdom
- Marubeni Corporation - India
- Indonesian Coal Mining Association
- Latin American Coal - Colombia
- PowerSource Philippines DevCo
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Indika Energy - Indonesia
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- Maheswari Brothers Coal Limited - India
- Bukit Baiduri Energy - Indonesia
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