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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, 13 January 16
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
Going through the second week of 2016 we could easily argue that at this point there are no visible signs of an imminent recovery in the Dry Bulk m ...
Wednesday, 13 January 16
IRON ORE IMPASSE - A FAILED CLAIM FOR CONVERSION - CLYDE & CO
KNOWLEDGE TO ELEVATE
In the recent case of the “Bao Yue”, the English High Court found that the bill of lading holder was liable t ...
Tuesday, 12 January 16
5700 GAR COAL FOR DELIVERY WITHIN Q1 FELL 0.91% WEEK OVER WEEK
COALspot.com: Average 5000 GAR coal index of Indonesian origin moved South direction week over week to averaging $39.96 per ton on last Friday, acc ...
Monday, 11 January 16
PORT OF NEWCASTLE SHIPPED 20% MORE COAL IN DECEMBER 2015; AVERAGE SELLING PRICE DECLINE 3.43%
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port has shipped $1.129 billio ...
Sunday, 10 January 16
LNG BUNKERING IN ASIA: FUELING A PROMISING FUTURE? - REED SMITH
The requirement of a mandatory reduction of sulphur content in bunker fuel proposed by the International Maritime Organisation (IMO) poses a challe ...
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Showing 2611 to 2615 news of total 6871 |
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- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Anglo American - United Kingdom
- Medco Energi Mining Internasional
- Semirara Mining and Power Corporation, Philippines
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Wood Mackenzie - Singapore
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Global Green Power PLC Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- LBH Netherlands Bv - Netherlands
- International Coal Ventures Pvt Ltd - India
- Dalmia Cement Bharat India
- Orica Australia Pty. Ltd.
- The State Trading Corporation of India Ltd
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Agrawal Coal Company - India
- Commonwealth Bank - Australia
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Intertek Mineral Services - Indonesia
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Australian Commodity Traders Exchange
- Ministry of Transport, Egypt
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Ministry of Finance - Indonesia
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- GMR Energy Limited - India
- Planning Commission, India
- Australian Coal Association
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Meralco Power Generation, Philippines
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Carbofer General Trading SA - India
- Leighton Contractors Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Merrill Lynch Commodities Europe
- Bhoruka Overseas - Indonesia
- CNBM International Corporation - China
- Ministry of Mines - Canada
- Meenaskhi Energy Private Limited - India
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Timah Investasi Mineral - Indoneisa
- Salva Resources Pvt Ltd - India
- Latin American Coal - Colombia
- Kalimantan Lumbung Energi - Indonesia
- Cigading International Bulk Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Bhatia International Limited - India
- Central Electricity Authority - India
- Posco Energy - South Korea
- SMC Global Power, Philippines
- Edison Trading Spa - Italy
- Kohat Cement Company Ltd. - Pakistan
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- Electricity Generating Authority of Thailand
- Mintek Dendrill Indonesia
- Holcim Trading Pte Ltd - Singapore
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Economic Council, Georgia
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Goldman Sachs - Singapore
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Port Waratah Coal Services - Australia
- Iligan Light & Power Inc, Philippines
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Tamil Nadu electricity Board
- Grasim Industreis Ltd - India
- Singapore Mercantile Exchange
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Banpu Public Company Limited - Thailand
- Lanco Infratech Ltd - India
- Coalindo Energy - Indonesia
- Essar Steel Hazira Ltd - India
- White Energy Company Limited
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Alfred C Toepfer International GmbH - Germany
- Romanian Commodities Exchange
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