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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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Saturday, 09 January 16
BALTIC DRY INDEX SINKS 10% WEEK OVER WEEK TO AN ALL-TIME LOW OF 429 POINTS
COALspot.com: The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, decline around 10% we ...
Friday, 08 January 16
FOB INDONESIA COAL SWAP FOR DELIVERY H1'16 REMAIN FLAT AS DEMAND DROPS OFF
COALspot.com: Indonesian coal swap delivery Q1 2016 declined month on month, flat week over week. The price for coal has been in a Dull Market sinc ...
Friday, 08 January 16
FOB RICHARDS BAY COAL SWAP FOR Q2'16 DELIVERY CLOSED UP $0.13 AT $45.50 PER TON
COALspot.com: Q1’ 2016 API4 FOB Richards Bay Coal swap decline month over month and slightly up week over week.
The Q1’ 2016 FOB R ...
Friday, 08 January 16
WEEKLY US COAL PRODUCTION DECLINES 1.6% TO 11.7 MMST, SAYS EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 11.7million short ...
Friday, 08 January 16
DRY BULK MARKET'S CRISIS DEEPENS AS RATES ARE DROPPING TO NEW RECORD LOWS BY THE DAY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Just when you would think that the dry bulk market is reaching its bottom, even as it has long surpassed all-time lows, each day that passes by at ...
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Showing 2616 to 2620 news of total 6871 |
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- Cement Manufacturers Association - India
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- GN Power Mariveles Coal Plant, Philippines
- Sakthi Sugars Limited - India
- Economic Council, Georgia
- Merrill Lynch Commodities Europe
- International Coal Ventures Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Parliament of New Zealand
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Grasim Industreis Ltd - India
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- IEA Clean Coal Centre - UK
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Jaiprakash Power Ventures ltd
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Australian Coal Association
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Mjunction Services Limited - India
- Medco Energi Mining Internasional
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Bayan Resources Tbk. - Indonesia
- Global Coal Blending Company Limited - Australia
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Salva Resources Pvt Ltd - India
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- Larsen & Toubro Limited - India
- Kepco SPC Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Goldman Sachs - Singapore
- Uttam Galva Steels Limited - India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Ambuja Cements Ltd - India
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Baramulti Group, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Aditya Birla Group - India
- Interocean Group of Companies - India
- New Zealand Coal & Carbon
- Marubeni Corporation - India
- White Energy Company Limited
- Toyota Tsusho Corporation, Japan
- Chettinad Cement Corporation Ltd - India
- Kobexindo Tractors - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- London Commodity Brokers - England
- European Bulk Services B.V. - Netherlands
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Carbofer General Trading SA - India
- Maheswari Brothers Coal Limited - India
- Singapore Mercantile Exchange
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Mercuria Energy - Indonesia
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Coal and Oil Company - UAE
- Kartika Selabumi Mining - Indonesia
- ICICI Bank Limited - India
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- CNBM International Corporation - China
- SMG Consultants - Indonesia
- Mercator Lines Limited - India
- Parry Sugars Refinery, India
- Australian Commodity Traders Exchange
- South Luzon Thermal Energy Corporation
- Xindia Steels Limited - India
- Metalloyd Limited - United Kingdom
- Deloitte Consulting - India
- Gujarat Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Port Waratah Coal Services - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Tata Chemicals Ltd - India
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Sree Jayajothi Cements Limited - India
- Kideco Jaya Agung - Indonesia
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Ministry of Transport, Egypt
- Romanian Commodities Exchange
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Vedanta Resources Plc - India
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Vizag Seaport Private Limited - India
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Meenaskhi Energy Private Limited - India
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Indo Tambangraya Megah - Indonesia
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