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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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Wednesday, 24 February 16
HOW IS THE FUEL MIX FOR U.S. ELECTRICITY GENERATION CHANGING? - EIA
In recent years, there have been changes in the mix of fuels used to generate electricity in the United States. Natural gas and renewable energy so ...
Wednesday, 24 February 16
PRIVATE EQUITY FUNDS LOOKING TO EXIT SHIPPING, MOST NOTABLY DRY BULK, AS OVERORDERING HAS RESULTED IN EXCESS TONNAGE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The injection of more than $13 billion in shipping from various private equity funds over the past few years has resulted in what many feared would ...
Monday, 22 February 16
4200 GAR COAL INDEX SETTLES AT $27.02, DOWN 0.07% FROM LAST WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.17 percent week over week to averaging $38.89 per ton on this past Friday, ...
Monday, 22 February 16
FREIGHT MARKETS PICKED UP SLIGHTLY THIS PAST WEEK
COALspot.com: The freight markets picked up slightly this past week.
The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measure of gl ...
Friday, 19 February 16
INDONESIAN HBA HITS A NEW LOWS BELOW $51 A TON AS OVERSUPPLY, LOW DEMAND WOES PERSIST
COALspot.com: Low coal demand and excess supplies sent Indonesian benchmark coal price further deep in February 2016. HBA has slumped second time t ...
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Showing 2551 to 2555 news of total 6871 |
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- Global Green Power PLC Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Mjunction Services Limited - India
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
- CNBM International Corporation - China
- Indian Energy Exchange, India
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- Merrill Lynch Commodities Europe
- Anglo American - United Kingdom
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Bukit Makmur.PT - Indonesia
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- GN Power Mariveles Coal Plant, Philippines
- Petron Corporation, Philippines
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Planning Commission, India
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- Coal and Oil Company - UAE
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Indogreen Group - Indonesia
- Madhucon Powers Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- PNOC Exploration Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Ind-Barath Power Infra Limited - India
- Sree Jayajothi Cements Limited - India
- Videocon Industries ltd - India
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Posco Energy - South Korea
- PTC India Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Larsen & Toubro Limited - India
- Indo Tambangraya Megah - Indonesia
- Eastern Energy - Thailand
- MS Steel International - UAE
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Salva Resources Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Bhoruka Overseas - Indonesia
- SMG Consultants - Indonesia
- Uttam Galva Steels Limited - India
- Cement Manufacturers Association - India
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Bangladesh Power Developement Board
- Power Finance Corporation Ltd., India
- Directorate General of MIneral and Coal - Indonesia
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Vedanta Resources Plc - India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- The State Trading Corporation of India Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Aboitiz Power Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- Australian Coal Association
- Renaissance Capital - South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Deloitte Consulting - India
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Xindia Steels Limited - India
- Coalindo Energy - Indonesia
- New Zealand Coal & Carbon
- Kideco Jaya Agung - Indonesia
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- European Bulk Services B.V. - Netherlands
- Leighton Contractors Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Altura Mining Limited, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Kartika Selabumi Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Sakthi Sugars Limited - India
- Georgia Ports Authority, United States
- Latin American Coal - Colombia
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- The University of Queensland
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- Marubeni Corporation - India
- PetroVietnam Power Coal Import and Supply Company
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Rashtriya Ispat Nigam Limited - India
- Eastern Coal Council - USA
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Iligan Light & Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Malabar Cements Ltd - India
- Indian Oil Corporation Limited
- Cigading International Bulk Terminal - Indonesia
- Gujarat Sidhee Cement - India
- Indika Energy - Indonesia
- Bhatia International Limited - India
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Siam City Cement - Thailand
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