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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, 17 February 16
THE OWNERS FACING HISTORICAL LOW DRY BULK RATES; COAL IMPORTS TO CHINA IS STILL POINTING TO A STRONG TREND OF DECLINING CONSUMPTION
The sharp fall in dry bulk rates that has been taking place since the end of last year and has left owners facing historical low rates for a substa ...
Monday, 15 February 16
CALL THE DOCTOR! SHIPPING'S MEDICAL DRAMA UNFOLDS......- CLARKSONS
The recycling market has started 2016 with a bang, with a huge volume of tonnage heading to demolition facilities. Many of the key shipping markets ...
Monday, 15 February 16
CS 42 COAL INDEX ROSE 0.07% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin decline 0.15 percent week over week to averaging $38.96 per ton on this past Friday, ...
Monday, 15 February 16
BALTIC INDEX MARGINALLY ROSE BY A POINT D-D; CAPESIZE INDEX DOWN 13 POINTS W-W; PANAMAX INDEX UP 29 POINTS W-W
COALspot.com: The freight markets continued to fall this past week.
The BDI, The Baltic Dry Index (BDI) of dry-bulk shipping freights, a measu ...
Friday, 12 February 16
DRY BULK MARKET'S FORTUNES STILL TIED WITH CHINA'S ECONOMY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The inevitable slowdown of the Chinese economy was expected to hurt dry bulk shipping, but few expected the blow to be this hard, especially given ...
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Showing 2561 to 2565 news of total 6871 |
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- White Energy Company Limited
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Videocon Industries ltd - India
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- SMC Global Power, Philippines
- Vedanta Resources Plc - India
- Bharathi Cement Corporation - India
- Eastern Energy - Thailand
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- Parliament of New Zealand
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Parry Sugars Refinery, India
- TNB Fuel Sdn Bhd - Malaysia
- Price Waterhouse Coopers - Russia
- Sindya Power Generating Company Private Ltd
- Latin American Coal - Colombia
- The State Trading Corporation of India Ltd
- Altura Mining Limited, Indonesia
- Intertek Mineral Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Vizag Seaport Private Limited - India
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Power Finance Corporation Ltd., India
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Larsen & Toubro Limited - India
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Indogreen Group - Indonesia
- Posco Energy - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Attock Cement Pakistan Limited
- Indian Energy Exchange, India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Bhatia International Limited - India
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Aboitiz Power Corporation - Philippines
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Australian Commodity Traders Exchange
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Orica Australia Pty. Ltd.
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Renaissance Capital - South Africa
- Jaiprakash Power Ventures ltd
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Malabar Cements Ltd - India
- GVK Power & Infra Limited - India
- SMG Consultants - Indonesia
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- PetroVietnam Power Coal Import and Supply Company
- Ambuja Cements Ltd - India
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- GN Power Mariveles Coal Plant, Philippines
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Aditya Birla Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- London Commodity Brokers - England
- Australian Coal Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Central Java Power - Indonesia
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- The Treasury - Australian Government
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Romanian Commodities Exchange
- Directorate General of MIneral and Coal - Indonesia
- Barasentosa Lestari - Indonesia
- Star Paper Mills Limited - India
- Riau Bara Harum - Indonesia
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Global Business Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- PNOC Exploration Corporation - Philippines
- Carbofer General Trading SA - India
- Global Coal Blending Company Limited - Australia
- Merrill Lynch Commodities Europe
- Africa Commodities Group - South Africa
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Deloitte Consulting - India
- PowerSource Philippines DevCo
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Electricity Authority, New Zealand
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