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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, 28 January 16
RICHARDS BAY COAL SWAPS FOR Q1,Q2 AND Q3 DELIVERIES FIRM THIS PAST WEEK
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap rose month over month and week over week.
The Q1’ 2016 FOB Richards Bay Coa ...
Wednesday, 27 January 16
API 5 FOB NEWCASTLE COAL SWAPS CLOSE MIXED
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2016 delivery rose another $1.17 per ton (3.13%) this past week compared to the sam ...
Wednesday, 27 January 16
CHINA'S STALLING ECONOMY HAS HAD A GREAT EFFECT ON VARIOUS COMMODITIES; DECREASED DEMAND DRIVING COMMODITY PRICES LOWER AND LOWER - LINOS ALEXANDROS KOGEVINAS
Having gone through the first few weeks of 2016, it’s starting to look like another challenging year is ahead of us. Hopes for a recovery in ...
Wednesday, 27 January 16
WORLD HARD COAL PRODUCTION AND CONSUMPTION DECLINE IN 2015 FOR THE FIRST TIME IN OVER A DECADE - VDKI
COALspot.com: Seaborne hard coal trade and the changes in this area were decisively affected by China and India - VDKi.
China bears the g ...
Tuesday, 26 January 16
Q3'16 CFR SOUTH CHINA COAL SWAP DROPPED BELOW $41 A TON
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2016 delivery rose US$ 0.82 (1.94%) per ton month over month.
A commodity swap is ...
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Showing 2586 to 2590 news of total 6871 |
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- TeaM Sual Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Ind-Barath Power Infra Limited - India
- Kobexindo Tractors - Indoneisa
- Ministry of Mines - Canada
- Anglo American - United Kingdom
- Sree Jayajothi Cements Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- CNBM International Corporation - China
- Meenaskhi Energy Private Limited - India
- Lanco Infratech Ltd - India
- Riau Bara Harum - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Siam City Cement - Thailand
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- PNOC Exploration Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Billiton Holdings Pty Ltd - Australia
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- Wood Mackenzie - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Banpu Public Company Limited - Thailand
- Eastern Coal Council - USA
- Therma Luzon, Inc, Philippines
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Timah Investasi Mineral - Indoneisa
- McConnell Dowell - Australia
- European Bulk Services B.V. - Netherlands
- Gujarat Sidhee Cement - India
- Posco Energy - South Korea
- Globalindo Alam Lestari - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Coal and Oil Company - UAE
- Edison Trading Spa - Italy
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Siam City Cement PLC, Thailand
- Agrawal Coal Company - India
- Intertek Mineral Services - Indonesia
- Mjunction Services Limited - India
- Parliament of New Zealand
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Independent Power Producers Association of India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Orica Mining Services - Indonesia
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Madhucon Powers Ltd - India
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Indika Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Coalindo Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Metalloyd Limited - United Kingdom
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Parry Sugars Refinery, India
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- PTC India Limited - India
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Ministry of Finance - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Kohat Cement Company Ltd. - Pakistan
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Borneo Indobara - Indonesia
- Chettinad Cement Corporation Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Altura Mining Limited, Indonesia
- Wilmar Investment Holdings
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Electricity Authority, New Zealand
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Indonesian Coal Mining Association
- Marubeni Corporation - India
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Merrill Lynch Commodities Europe
- Binh Thuan Hamico - Vietnam
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- PowerSource Philippines DevCo
- Xindia Steels Limited - India
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Toyota Tsusho Corporation, Japan
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- Chamber of Mines of South Africa
- Rio Tinto Coal - Australia
- Karbindo Abesyapradhi - Indoneisa
- Central Java Power - Indonesia
- IHS Mccloskey Coal Group - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- SMG Consultants - Indonesia
- Savvy Resources Ltd - HongKong
- Tata Chemicals Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bharathi Cement Corporation - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Simpson Spence & Young - Indonesia
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Sakthi Sugars Limited - India
- Bhushan Steel Limited - India
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- VISA Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Larsen & Toubro Limited - India
- The State Trading Corporation of India Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Australian Coal Association
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