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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, 05 June 21
IT'S TIME FOR THE BIDEN ADMINISTRATION TO CHAMPION RENEWABLE ENERGY IN THE PHILIPPINES, NOT NUCLEAR OR FOSSIL GAS - IEEFA
Fossil gas and nuclear investments risk locking in costly, outdated infrastructure for the long-term
The United States has spent the ...
Friday, 04 June 21
NEW COAL-FIRED POWER PLANTS IN INDIA WILL BE ECONOMICALLY UNVIABLE - IEEFA
Coal capacity additions face major stranded asset risk
Much of India’s 33 gigawatts (GW) of coal-fired power capacity currently under co ...
Thursday, 03 June 21
JUNE HBA IS HITTING ABOVE $100 AND SETTLED AT ITS HIGHEST SINCE OCTOBER 2020
COALspot.com: The Indonesia coal price reference for June 2021 settles at US$ 100.33 per ton FOB vessel.
The Indonesia coal pr ...
Wednesday, 02 June 21
INDONESIA RV WAS DOWN TO LOW/MID $20,000S DAY FOR PANAMAX/KAMSARMAX WITH DELIVERY S CHINA - BANCHERO COSTA
Panamax
A softening week in the Pacific basin with rates under a downward pressure mainly caused by the oversupply of tonnage in the area, said ...
Wednesday, 02 June 21
EUROPEAN UNION'S IRON ORE IMPORTS - BANCHERO COSTA
The European Union (27) is currently the fourth largest importer of iron ore in the world, after China, Japan, and South Korea.
Euro ...
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- Planning Commission, India
- Goldman Sachs - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Jaiprakash Power Ventures ltd
- Coastal Gujarat Power Limited - India
- Thiess Contractors Indonesia
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Kideco Jaya Agung - Indonesia
- Straits Asia Resources Limited - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Medco Energi Mining Internasional
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- GVK Power & Infra Limited - India
- Uttam Galva Steels Limited - India
- Grasim Industreis Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Orica Mining Services - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Eastern Coal Council - USA
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Videocon Industries ltd - India
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Borneo Indobara - Indonesia
- Chamber of Mines of South Africa
- The State Trading Corporation of India Ltd
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Kartika Selabumi Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Central Java Power - Indonesia
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- CNBM International Corporation - China
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Global Business Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Riau Bara Harum - Indonesia
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Electricity Generating Authority of Thailand
- Vizag Seaport Private Limited - India
- Ministry of Mines - Canada
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Interocean Group of Companies - India
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Economic Council, Georgia
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Iligan Light & Power Inc, Philippines
- India Bulls Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Bukit Baiduri Energy - Indonesia
- ICICI Bank Limited - India
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Africa Commodities Group - South Africa
- Cement Manufacturers Association - India
- Baramulti Group, Indonesia
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Heidelberg Cement - Germany
- Savvy Resources Ltd - HongKong
- Petron Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Tamil Nadu electricity Board
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- PTC India Limited - India
- PNOC Exploration Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Sojitz Corporation - Japan
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Dalmia Cement Bharat India
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Oldendorff Carriers - Singapore
- Power Finance Corporation Ltd., India
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Sinarmas Energy and Mining - Indonesia
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- PetroVietnam Power Coal Import and Supply Company
- Neyveli Lignite Corporation Ltd, - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Therma Luzon, Inc, Philippines
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bhatia International Limited - India
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Intertek Mineral Services - Indonesia
- Ministry of Finance - Indonesia
- Bukit Makmur.PT - Indonesia
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