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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, 03 March 16
BDI FURTHER STRENGTHENING; THE INCREASE IN RATES WAS NOT SUBSTANTIAL
COALspot.com: The BDI closed off on a positive note for a second week in a row, further strengthening the belief that the market might be bottoming ...
Thursday, 03 March 16
RIO TINTO COMPLETES SALE OF INTEREST IN BENGALLA JOINT VENTURE FOR US$616.7 MILLION
COALspot.com: Rio Tinto has completed the sale of its 40 per cent interest in the Bengalla coal Joint Venture in Australia to New Hope Corporation ...
Wednesday, 02 March 16
RE-EVALUATION OF MINING LICENSES CLEAN AND CLEAR STATUS IN INDONESIA
COALspot.com: In connection with the transfer of mining authority from Regents/Mayors to Governors1 and from Regents/Mayors and Governors to t ...
Wednesday, 02 March 16
OIL MY GOD.....!!!!
OIL my GOD….!!!!
The oil price “crash” that started in 2014 was caused by a glut of practically unwanted oil. Producers had be ...
Tuesday, 01 March 16
CS 42 (4200 GAR) COAL INDEX CLOSED AT US$ 27.11 A TON ON 26 FEBRUARY
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.31 percent week over week to averaging $38.77 per ton on this past Friday, ...
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Showing 2541 to 2545 news of total 6871 |
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indian Oil Corporation Limited
- Simpson Spence & Young - Indonesia
- Binh Thuan Hamico - Vietnam
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Petron Corporation, Philippines
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Bhushan Steel Limited - India
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- New Zealand Coal & Carbon
- Energy Link Ltd, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Siam City Cement - Thailand
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- South Luzon Thermal Energy Corporation
- Minerals Council of Australia
- Kobexindo Tractors - Indoneisa
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- VISA Power Limited - India
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Central Java Power - Indonesia
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- PetroVietnam Power Coal Import and Supply Company
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SN Aboitiz Power Inc, Philippines
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Sakthi Sugars Limited - India
- IEA Clean Coal Centre - UK
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- MS Steel International - UAE
- Bayan Resources Tbk. - Indonesia
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Aditya Birla Group - India
- GMR Energy Limited - India
- Chettinad Cement Corporation Ltd - India
- Tamil Nadu electricity Board
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- PTC India Limited - India
- White Energy Company Limited
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Medco Energi Mining Internasional
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Larsen & Toubro Limited - India
- Energy Development Corp, Philippines
- Oldendorff Carriers - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Karaikal Port Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Maharashtra Electricity Regulatory Commission - India
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Authority, New Zealand
- Deloitte Consulting - India
- Indogreen Group - Indonesia
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- The University of Queensland
- Attock Cement Pakistan Limited
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Cigading International Bulk Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- GVK Power & Infra Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Directorate Of Revenue Intelligence - India
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- ASAPP Information Group - India
- Indo Tambangraya Megah - Indonesia
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Romanian Commodities Exchange
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- SMC Global Power, Philippines
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
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