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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, 06 March 21
AUSTRALIAN COAL: SOME WEAKNESS COULD MATERIALIZE AFTER THE WINTER - ING
Newcastle coal prices remain well supported for now, however as we move out of the winter months we would expect prices to come under pressure. Mea ...
Saturday, 06 March 21
ASIA SEABORNE COAL PRICES START TO RETREAT, CHINA-AUSTRALIA DISPUTE LINGERS - REUTERS
There are signs that the price and demand surge for coal during the recent colder-than-expected winter across North Asia is starting to ease, even ...
Thursday, 04 March 21
HEAD OF JBIC SAYS THE JAPANESE BANK WILL NOT FUND NEW COAL PLANT DEVELOPMENT - NHK NEWS
The governor of the Japan Bank for International Cooperation has said that the government-owned financial institution will stop funding new coal-fi ...
Wednesday, 03 March 21
MARKET INSIGHT - INTERMODAL
Following the recent rally to multi year highs of metal-based commodities, amid an unprecedented global economic stimulus, discussions of an emergi ...
Saturday, 27 February 21
CHINA'S BENCHMARK POWER COAL PRICE EDGES DOWN - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
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- PNOC Exploration Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
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- Indian Energy Exchange, India
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- Antam Resourcindo - Indonesia
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- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
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- Holcim Trading Pte Ltd - Singapore
- Indo Tambangraya Megah - Indonesia
- Karaikal Port Pvt Ltd - India
- Rio Tinto Coal - Australia
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Xindia Steels Limited - India
- White Energy Company Limited
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- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
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- Renaissance Capital - South Africa
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- Latin American Coal - Colombia
- International Coal Ventures Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Singapore Mercantile Exchange
- Power Finance Corporation Ltd., India
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Ministry of Transport, Egypt
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Sakthi Sugars Limited - India
- San Jose City I Power Corp, Philippines
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Minerals Council of Australia
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Sinarmas Energy and Mining - Indonesia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- TeaM Sual Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Salva Resources Pvt Ltd - India
- Independent Power Producers Association of India
- LBH Netherlands Bv - Netherlands
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Bayan Resources Tbk. - Indonesia
- Uttam Galva Steels Limited - India
- Vedanta Resources Plc - India
- Formosa Plastics Group - Taiwan
- Coalindo Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Bhushan Steel Limited - India
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- India Bulls Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Goldman Sachs - Singapore
- The University of Queensland
- Meralco Power Generation, Philippines
- Energy Development Corp, Philippines
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- London Commodity Brokers - England
- Parry Sugars Refinery, India
- CIMB Investment Bank - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Africa Commodities Group - South Africa
- CNBM International Corporation - China
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Lanco Infratech Ltd - India
- Georgia Ports Authority, United States
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- ICICI Bank Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Jaiprakash Power Ventures ltd
- Mjunction Services Limited - India
- Coal and Oil Company - UAE
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Chamber of Mines of South Africa
- Thai Mozambique Logistica
- Indian Oil Corporation Limited
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- SN Aboitiz Power Inc, Philippines
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- IEA Clean Coal Centre - UK
- Altura Mining Limited, Indonesia
- Sarangani Energy Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Agrawal Coal Company - India
- McConnell Dowell - Australia
- Carbofer General Trading SA - India
- Meenaskhi Energy Private Limited - India
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- Bhatia International Limited - India
- Bhoruka Overseas - Indonesia
- Australian Coal Association
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Cement Manufacturers Association - India
- PowerSource Philippines DevCo
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Ministry of Mines - Canada
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Eastern Coal Council - USA
- New Zealand Coal & Carbon
- Iligan Light & Power Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kapuas Tunggal Persada - Indonesia
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Vizag Seaport Private Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kideco Jaya Agung - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- VISA Power Limited - India
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Directorate General of MIneral and Coal - Indonesia
- Mercator Lines Limited - India
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Commonwealth Bank - Australia
- Kalimantan Lumbung Energi - Indonesia
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- The State Trading Corporation of India Ltd
- Global Business Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Malabar Cements Ltd - India
- Parliament of New Zealand
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