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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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Wednesday, 26 May 21
NEW POWER AND ENERGY MASTER PLAN MUST BE DESIGNED IN BANGLADESH'S BEST INTERESTS, NOT JAPAN'S - IEEFA
JICA must deliver a low or zero emissions plan as promised, not fund Matarbari 2 coal plant
Clear understandings from the Bangladesh ...
Tuesday, 25 May 21
KOREA SOUTHERN POWER INVITED BIDS FOR 870,000 MT OF MIN 5300 NCV COAL FOR 2021 TO 2023.
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for total 870,000 MT of Min 5,300 kcal/kg NCV coal for Augu ...
Tuesday, 25 May 21
CHINA’S COAL OUTPUT RISES IN FIRST FOUR MONTHS - XINHUA
China’s raw coal output rose 11.1 percent year on year to 1.29 billion tonnes in the first four months of 2021, official data showed.
&nb ...
Tuesday, 25 May 21
MARINE SHIPPERS BULK UP: ANOTHER GAME OF CHICKEN IN THE WORKS? - THE KOREA TIMES
Global shipping companies have been placing orders for large ships, with many anticipating further increased competition within the next three year ...
Friday, 21 May 21
MARKET INSIGHT - INTERMODAL
The dry bulk market’s counter seasonal surge so far into the first half of the year -in a sort of 2010 manner - and Capesize’s recent r ...
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- Power Finance Corporation Ltd., India
- Anglo American - United Kingdom
- Coastal Gujarat Power Limited - India
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Ambuja Cements Ltd - India
- Cement Manufacturers Association - India
- Petron Corporation, Philippines
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- White Energy Company Limited
- Riau Bara Harum - Indonesia
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- London Commodity Brokers - England
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Borneo Indobara - Indonesia
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Meenaskhi Energy Private Limited - India
- Kaltim Prima Coal - Indonesia
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Bukit Makmur.PT - Indonesia
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Global Business Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Sojitz Corporation - Japan
- Ministry of Mines - Canada
- Asmin Koalindo Tuhup - Indonesia
- Rio Tinto Coal - Australia
- Bukit Baiduri Energy - Indonesia
- Bharathi Cement Corporation - India
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Australian Coal Association
- Carbofer General Trading SA - India
- PTC India Limited - India
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Antam Resourcindo - Indonesia
- Globalindo Alam Lestari - Indonesia
- Standard Chartered Bank - UAE
- Kideco Jaya Agung - Indonesia
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Sinarmas Energy and Mining - Indonesia
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Kobexindo Tractors - Indoneisa
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- Kartika Selabumi Mining - Indonesia
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Gujarat Mineral Development Corp Ltd - India
- The Treasury - Australian Government
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Parry Sugars Refinery, India
- Bangladesh Power Developement Board
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Australian Commodity Traders Exchange
- Rashtriya Ispat Nigam Limited - India
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Kumho Petrochemical, South Korea
- Thai Mozambique Logistica
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Aboitiz Power Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- Metalloyd Limited - United Kingdom
- IHS Mccloskey Coal Group - USA
- Chamber of Mines of South Africa
- OPG Power Generation Pvt Ltd - India
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Toyota Tsusho Corporation, Japan
- Essar Steel Hazira Ltd - India
- Renaissance Capital - South Africa
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Kapuas Tunggal Persada - Indonesia
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- Indian Energy Exchange, India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- PetroVietnam Power Coal Import and Supply Company
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Binh Thuan Hamico - Vietnam
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Bhoruka Overseas - Indonesia
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Ind-Barath Power Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Orica Australia Pty. Ltd.
- Grasim Industreis Ltd - India
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Samtan Co., Ltd - South Korea
- Vizag Seaport Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Heidelberg Cement - Germany
- ICICI Bank Limited - India
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Malabar Cements Ltd - India
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Medco Energi Mining Internasional
- GN Power Mariveles Coal Plant, Philippines
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Latin American Coal - Colombia
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Ministry of Finance - Indonesia
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