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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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Saturday, 17 July 21
COAL PRICES TRADE AT DECADE HIGH OF $140 PER TONNE, HERE ARE SOME FACTORS AT PLAY: CNBC-TV18
Coal prices are trading at $140 per tonne. In the last one week, coal has seen more than 8 percent gains; the last one month has seen 24 percent ju ...
Thursday, 15 July 21
U.S. FOSSIL FUEL CONSUMPTION FELL BY 9% IN 2020, THE LOWEST LEVEL IN NEARLY 30 YEARS - EIA
U.S. fossil fuel consumption fell by 9% in 2020, the lowest level in nearly 30 years
In 2020, total consumption of fossil fuels in t ...
Thursday, 15 July 21
IN 2020, U.S. COAL PRODUCTION FELL TO ITS LOWEST LEVEL SINCE 1965 - EIA
U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24% decrease from the 706 MMst mined in 2019 and the lowest level of coal pro ...
Wednesday, 14 July 21
MARKET INSIGHT - INTERMODAL
In its latest Global Economic Prospects report, the world bank recorded the strongest post-recession global growth in 80 years, but emerging and de ...
Tuesday, 13 July 21
JAPAN STILL SEEKING TO EXPLOIT COAL POWER LOOPHOLES - IEEFA
JBIC wants to continue burdening developing nations with its expensive coal-fired power technology
Japan is continuing to push its expensive c ...
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- Power Finance Corporation Ltd., India
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- McConnell Dowell - Australia
- Mintek Dendrill Indonesia
- Antam Resourcindo - Indonesia
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
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- Central Electricity Authority - India
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- Xindia Steels Limited - India
- Independent Power Producers Association of India
- White Energy Company Limited
- MS Steel International - UAE
- Latin American Coal - Colombia
- Directorate General of MIneral and Coal - Indonesia
- Sarangani Energy Corporation, Philippines
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Toyota Tsusho Corporation, Japan
- New Zealand Coal & Carbon
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- Wilmar Investment Holdings
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- SMC Global Power, Philippines
- Bukit Baiduri Energy - Indonesia
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Minerals Council of Australia
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Simpson Spence & Young - Indonesia
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Thai Mozambique Logistica
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Marubeni Corporation - India
- Metalloyd Limited - United Kingdom
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Standard Chartered Bank - UAE
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- Global Green Power PLC Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Commonwealth Bank - Australia
- Energy Link Ltd, New Zealand
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Indian Oil Corporation Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Alfred C Toepfer International GmbH - Germany
- Eastern Coal Council - USA
- Deloitte Consulting - India
- Petron Corporation, Philippines
- Sojitz Corporation - Japan
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- Planning Commission, India
- Electricity Authority, New Zealand
- Anglo American - United Kingdom
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- Bayan Resources Tbk. - Indonesia
- Medco Energi Mining Internasional
- Coastal Gujarat Power Limited - India
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Wood Mackenzie - Singapore
- Grasim Industreis Ltd - India
- Mercator Lines Limited - India
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Kartika Selabumi Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Samtan Co., Ltd - South Korea
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Uttam Galva Steels Limited - India
- Carbofer General Trading SA - India
- International Coal Ventures Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Globalindo Alam Lestari - Indonesia
- Aditya Birla Group - India
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- Kumho Petrochemical, South Korea
- Holcim Trading Pte Ltd - Singapore
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Semirara Mining Corp, Philippines
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Dalmia Cement Bharat India
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- The State Trading Corporation of India Ltd
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- ASAPP Information Group - India
- Videocon Industries ltd - India
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Coal and Oil Company - UAE
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Sidhee Cement - India
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- IEA Clean Coal Centre - UK
- Kideco Jaya Agung - Indonesia
- Baramulti Group, Indonesia
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