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Wednesday, 17 March 21
MARKET INSIGHT - INTERMODAL
 Shipping market players are familiar with the inverse correlation between the freight market and demolition activity i.e. when the market picks up we usually observe demolition activity declining and vice versa, while the level of scrapping eventually contributes to a new market equilibrium.
In order for demolition activity to be impacted in either direction, market expectations for the medium term have to be aligned with actual freight market conditions and thus demolition activity reacts with some time lag to the current freight market environment. The decision to sell a vessel for scrap is not only driven by the state of the market cycle and expectations, but to a great extent by the offered scrap price at the time vs the price fetched at the 2nd hand market.
As we stand, owners of vintage tonnage are obviously trying to exploit the current sound performance across all Dry Bulk & Container segments and prefer to keep their vessels for further trading rather than turning to beach yards. Despite positive market conditions in these two segments, possible demolition candidates could be those old units that have to be docked for surveys and their Owners are not in favor of bearing this cost, or the parties that are looking for a fleet renewal. Still, in order to make the demolition decision tempting for them, scrap prices should rise further. Already, scrap prices have risen more than 10% since the beginning of the year, and are up more than 29% compared to last year.
So far during Q1 2021, the freight market and expectations in the Dry Bulk & containers segment have been extremely optimistic, whilst the wet market is still to recover from the severe downturn experienced as a result of oil supply cuts and soft demand amid the ongoing COVID-19 pandemic. YTD dry bulk scrapping rate in dwt terms is estimated -21% below the same period last year, while tankers scrapping is estimated +91.1% y-o-y.
However, taking a closer look at the tankers sold for scrap, we would expect that the current market conditions (with VLCC rates suppressed since the beginning of the year and recently turning negative) would favor the larger crude carriers towards scrap yards. Instead, since the beginning of the year, about 11 vessels were confirmed to be scrapped with half of them being Handysize or MR tankers, while the rest consist mainly of Aframax, two shuttle tankers and no VLCCs.
We could argue that maybe owners of the larger crude tankers have enough buffer from last year’s stellar earnings amid floating storage economics skyrocketing and thus can sustain adverse market conditions, but also expect that the market will turn a corner should OPEC+ reverses oil supply cuts in the next months. We could also argue that owners prefer to sell their vessels in the 2nd hand market, as the premium they are currently getting over selling them for scrap is quite substantial.
While scrap prices are expected to rise further during the 2H of the year amid increased demand for scrap restocking, it remains to be seen how all of the above factors will impact demolition activity across the different shipping segments, with expectations for tanker scrapping activity increasing nonetheless coming in higher.
By George Kallianiotis,
Valuation Department
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
Mr.George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Friday, 13 August 21
INDONESIA’S COAL EXPORTS TO JAPAN DECLINED BY -26.3% YOY TO 11.9 MLN TONNES IN THE FIRST 7 MONTHS OF 2021; STILL THE SECOND LARGEST SOURCE FOR JAPAN’S COAL IMPORTS IS INDONESIA - BANCHERO COSTA
2020 proved to be a truly terrible year for global seaborne coal trade. Total global loadings in the 12 months of 2020 were down -12.7% year-on-yea ...
Thursday, 12 August 21
ONLY 3 VLCCS SOLD FOR DEMOLITION IN 2021 AS SECONDHAND PRICES TEMPT - BIMCO
During the first seven months of 2021, only three actively trading Very Large Crude Carriers (VLCCs) have been sold for demolition. The current mar ...
Wednesday, 11 August 21
U.S: EIA EXPECTS COAL EXPORTS TO TOTAL 90 MMST IN 2021, 30% INCREASE FROM 2020
Coal production in EIA's forecast totals 607 million short tons (MMst) in 2021, an increase of 13% over 2020.
EIA is also ...
Wednesday, 11 August 21
MARKET INSIGHT - INTERMODAL
Energy is at the core of the global climate dialogue as the climate challenge is essentially an energy challenge. Policy experts around the world a ...
Tuesday, 10 August 21
34 INDONESIAN COAL COMPANIES TEMPORARILY BANNED FOR COAL EXPORTS
The Ministry of Energy and Mineral Resources (ESDM) has imposed sanctions in the form of a coal export ban for 34 coal companies as reported by CNB ...
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- Bhushan Steel Limited - India
- Parliament of New Zealand
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Altura Mining Limited, Indonesia
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Kohat Cement Company Ltd. - Pakistan
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Wilmar Investment Holdings
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Deloitte Consulting - India
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Sical Logistics Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- European Bulk Services B.V. - Netherlands
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kideco Jaya Agung - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Orica Australia Pty. Ltd.
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Directorate Of Revenue Intelligence - India
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- LBH Netherlands Bv - Netherlands
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- Uttam Galva Steels Limited - India
- Interocean Group of Companies - India
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Maheswari Brothers Coal Limited - India
- Independent Power Producers Association of India
- Grasim Industreis Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Latin American Coal - Colombia
- Energy Link Ltd, New Zealand
- Toyota Tsusho Corporation, Japan
- Coastal Gujarat Power Limited - India
- Straits Asia Resources Limited - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement - Thailand
- OPG Power Generation Pvt Ltd - India
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Directorate General of MIneral and Coal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Vijayanagar Sugar Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Baramulti Group, Indonesia
- Economic Council, Georgia
- Heidelberg Cement - Germany
- Banpu Public Company Limited - Thailand
- Planning Commission, India
- Rashtriya Ispat Nigam Limited - India
- IHS Mccloskey Coal Group - USA
- Jorong Barutama Greston.PT - Indonesia
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Trasteel International SA, Italy
- Asmin Koalindo Tuhup - Indonesia
- Ministry of Mines - Canada
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- Cigading International Bulk Terminal - Indonesia
- India Bulls Power Limited - India
- Georgia Ports Authority, United States
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- IEA Clean Coal Centre - UK
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Thai Mozambique Logistica
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- Global Business Power Corporation, Philippines
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Kumho Petrochemical, South Korea
- Gujarat Sidhee Cement - India
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Wood Mackenzie - Singapore
- Chettinad Cement Corporation Ltd - India
- New Zealand Coal & Carbon
- Neyveli Lignite Corporation Ltd, - India
- Bulk Trading Sa - Switzerland
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
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