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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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Monday, 29 March 21
MOODY'S: OUTLOOK FOR GLOBAL METALS AND MINING INDUSTRY TURNS POSITIVE ON HIGHER EBITDA IN PANDEMIC'S WAKE
- Demand for steel, iron ore and copper will rise, while aluminum, nickel and zinc will remain in surplus
- EBITDA is expected to ...
Thursday, 25 March 21
'OMNIBUS LAW' REGULATION ON INDONESIA’S ENERGY AND MINING SECTORS TO BOOST COAL PROCESSING BUT ALSO RAISES QUESTIONS - ABNR
February 2021 saw the issuance of a raft of new government regulations to give effect to the reformist Job Creation Law (colloquially known as the ...
Thursday, 25 March 21
PROPOSED SWITCH FROM COAL TO LNG THREATENS RENEWABLE ENERGY DEVELOPMENT IN ASIA - IEEFA
Renewables offer an ever cheaper, financially sustainable and energy secure alternative, better able to support developing nations
A ...
Thursday, 25 March 21
MAJOR INVESTMENT ADVISORS BLACKROCK AND MEKETA PROVIDE A FIDUCIARY PATH THROUGH THE ENERGY TRANSITION - IEEFA
BlackRock and Meketa say divestment from fossil fuels improves, not weakens, investment returns
Two major financial management firms ...
Thursday, 25 March 21
EUROPE PASSES MILESTONE WITH HALF OF COAL PLANTS CLOSED OR SET TO RETIRE BY 2030 - EURACTIV
Half of Europe’s 324 coal-fueled power plants have either closed or announced a retirement date before 2030, it emerged on Monday (22 March) ...
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- Oldendorff Carriers - Singapore
- Trasteel International SA, Italy
- Rashtriya Ispat Nigam Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhoruka Overseas - Indonesia
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Globalindo Alam Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Medco Energi Mining Internasional
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- Samtan Co., Ltd - South Korea
- Videocon Industries ltd - India
- Sojitz Corporation - Japan
- Indika Energy - Indonesia
- Riau Bara Harum - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- New Zealand Coal & Carbon
- Kohat Cement Company Ltd. - Pakistan
- Makarim & Taira - Indonesia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Billiton Holdings Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Independent Power Producers Association of India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Madhucon Powers Ltd - India
- Parry Sugars Refinery, India
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Sindya Power Generating Company Private Ltd
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Goldman Sachs - Singapore
- MS Steel International - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Malabar Cements Ltd - India
- Heidelberg Cement - Germany
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Deloitte Consulting - India
- Electricity Generating Authority of Thailand
- Chettinad Cement Corporation Ltd - India
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Kobexindo Tractors - Indoneisa
- Uttam Galva Steels Limited - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Australian Coal Association
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Sakthi Sugars Limited - India
- Orica Australia Pty. Ltd.
- AsiaOL BioFuels Corp., Philippines
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Indian Energy Exchange, India
- PTC India Limited - India
- Thiess Contractors Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- Bhatia International Limited - India
- Minerals Council of Australia
- Semirara Mining Corp, Philippines
- Parliament of New Zealand
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- The University of Queensland
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Interocean Group of Companies - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- Asmin Koalindo Tuhup - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Vizag Seaport Private Limited - India
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Jindal Steel & Power Ltd - India
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Bulk Trading Sa - Switzerland
- Commonwealth Bank - Australia
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Makmur.PT - Indonesia
- San Jose City I Power Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Edison Trading Spa - Italy
- Larsen & Toubro Limited - India
- Bhushan Steel Limited - India
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Maharashtra Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Mjunction Services Limited - India
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Carbofer General Trading SA - India
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- Siam City Cement PLC, Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Agrawal Coal Company - India
- Toyota Tsusho Corporation, Japan
- Global Business Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Simpson Spence & Young - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Kaltim Prima Coal - Indonesia
- Siam City Cement - Thailand
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
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