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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, 27 February 21
FITCH RATINGS REVISES GLOBAL METALS AND MINING PRICE ASSUMPTIONS
Fitch Ratings has revised some of its metals and mining price assumptions as prices for many commodities will benefit in the short term from return ...
Saturday, 27 February 21
MITSUBISHI PULLS OUT OF VINH TAN 3 COAL PROJECT IN VIETNAM - NIKKEI ASIA
Japanese trading house Mitsubishi Corp. decided Thursday to withdraw from the Vinh Tan 3 coal-fired power plant project in Vietnam amid growing int ...
Thursday, 25 February 21
ARE WE ON THE CUSP OF ANOTHER MINING SUPER-CYCLE? - WOOD MACKENZIE
As the first wave of the coronavirus pandemic began to bite, many observers confidently predicted that the end was nigh for global economic activit ...
Thursday, 25 February 21
2020 PROVED TO BE A TRULY TERRIBLE YEAR FOR SEABORNE COAL TRADE - BANCHERO COSTA
Total loadings in the 12 months of 2020 were down -12.7% year-on-year to 1,130 million tonnes, according to vessels tracking data from Refinitiv, s ...
Wednesday, 24 February 21
MARKET INSIGHT - INTERMODAL
With yields of up to 563%, the shares of Greek shipping companies listed on Wall Street are recorded. The Coronavirus pandemic has not significantl ...
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- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Savvy Resources Ltd - HongKong
- Posco Energy - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Independent Power Producers Association of India
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- San Jose City I Power Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Barasentosa Lestari - Indonesia
- Parry Sugars Refinery, India
- Thai Mozambique Logistica
- Eastern Energy - Thailand
- Standard Chartered Bank - UAE
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
- The University of Queensland
- Central Electricity Authority - India
- IHS Mccloskey Coal Group - USA
- Videocon Industries ltd - India
- Carbofer General Trading SA - India
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Star Paper Mills Limited - India
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Australian Commodity Traders Exchange
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Eastern Coal Council - USA
- Coastal Gujarat Power Limited - India
- Deloitte Consulting - India
- Economic Council, Georgia
- Attock Cement Pakistan Limited
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- CNBM International Corporation - China
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- GVK Power & Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jaiprakash Power Ventures ltd
- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Port Waratah Coal Services - Australia
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Oldendorff Carriers - Singapore
- Siam City Cement - Thailand
- Ministry of Transport, Egypt
- Sakthi Sugars Limited - India
- Therma Luzon, Inc, Philippines
- Central Java Power - Indonesia
- Wilmar Investment Holdings
- Bharathi Cement Corporation - India
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- IEA Clean Coal Centre - UK
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- European Bulk Services B.V. - Netherlands
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- ASAPP Information Group - India
- CIMB Investment Bank - Malaysia
- Grasim Industreis Ltd - India
- Karaikal Port Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Straits Asia Resources Limited - Singapore
- Intertek Mineral Services - Indonesia
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- PNOC Exploration Corporation - Philippines
- Singapore Mercantile Exchange
- Minerals Council of Australia
- Samtan Co., Ltd - South Korea
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Maheswari Brothers Coal Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Asmin Koalindo Tuhup - Indonesia
- Tata Chemicals Ltd - India
- The Treasury - Australian Government
- GMR Energy Limited - India
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- Baramulti Group, Indonesia
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- South Luzon Thermal Energy Corporation
- Iligan Light & Power Inc, Philippines
- TeaM Sual Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- New Zealand Coal & Carbon
- Electricity Generating Authority of Thailand
- Sojitz Corporation - Japan
- Malabar Cements Ltd - India
- SMC Global Power, Philippines
- Sree Jayajothi Cements Limited - India
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Billiton Holdings Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Cement Manufacturers Association - India
- White Energy Company Limited
- Renaissance Capital - South Africa
- Larsen & Toubro Limited - India
- Latin American Coal - Colombia
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- Makarim & Taira - Indonesia
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Altura Mining Limited, Indonesia
- Bukit Baiduri Energy - Indonesia
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Planning Commission, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Aditya Birla Group - India
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
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