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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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Friday, 29 January 21
OPEC+, COVID-19 AND ENERGY TRANSITION - 3 THEMES IMPACTING OIL MARKETS AND REFINING IN 2021 - WOOD MACKENZIE
Wood Mackenzie’s latest outlook report shows that the art of balancing oil markets and the refining sector in 2021 hinges upon three key them ...
Thursday, 28 January 21
STRONG CHINESE THERMAL COAL IMPORTS TO BENEFIT INDONESIAN MINERS IN THE NEAR TERM - FITCH RATINGS
China's thermal coal imports are likely to remain strong ahead of the Chinese New Year in mid-February on robust demand, high utilisation at do ...
Thursday, 28 January 21
WIND PROPULSION FOR DRY BULK CARRIERS - OLDENDORFF
Oldendorff Carriers (OC) has signed a Joint Development Project (JDP) with Anemoi Marine Technologies (Anemoi), Lloyd’s Register (LR) and Sha ...
Thursday, 28 January 21
BUMA PRICED A USD400 MILLION 7.75% 5-YEAR SENIOR NOTES
PT Delta Dunia Makmur Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama priced a USD400 million 5-year (non-callable 2-year)& ...
Wednesday, 27 January 21
MARKET INSIGHT - INTERMODAL
As we have entered the era off renewable energies, all industries globally give max effort to minimize their carbon footprint and consequently thei ...
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- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Planning Commission, India
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
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- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Asmin Koalindo Tuhup - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- AsiaOL BioFuels Corp., Philippines
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- White Energy Company Limited
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Bharathi Cement Corporation - India
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Central Electricity Authority - India
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- Indonesian Coal Mining Association
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Riau Bara Harum - Indonesia
- Banpu Public Company Limited - Thailand
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- New Zealand Coal & Carbon
- Mercuria Energy - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- The University of Queensland
- Maharashtra Electricity Regulatory Commission - India
- Australian Coal Association
- Borneo Indobara - Indonesia
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Videocon Industries ltd - India
- Marubeni Corporation - India
- Meralco Power Generation, Philippines
- Bukit Baiduri Energy - Indonesia
- PNOC Exploration Corporation - Philippines
- San Jose City I Power Corp, Philippines
- Trasteel International SA, Italy
- Eastern Energy - Thailand
- IHS Mccloskey Coal Group - USA
- Star Paper Mills Limited - India
- Grasim Industreis Ltd - India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- MS Steel International - UAE
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Uttam Galva Steels Limited - India
- Semirara Mining and Power Corporation, Philippines
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Sarangani Energy Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Latin American Coal - Colombia
- Maheswari Brothers Coal Limited - India
- South Luzon Thermal Energy Corporation
- Energy Link Ltd, New Zealand
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Attock Cement Pakistan Limited
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Gujarat Electricity Regulatory Commission - India
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Global Business Power Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Tata Chemicals Ltd - India
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- The State Trading Corporation of India Ltd
- ICICI Bank Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Heidelberg Cement - Germany
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Toyota Tsusho Corporation, Japan
- SMG Consultants - Indonesia
- Orica Mining Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Leighton Contractors Pty Ltd - Australia
- Wilmar Investment Holdings
- Price Waterhouse Coopers - Russia
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Indo Tambangraya Megah - Indonesia
- Mjunction Services Limited - India
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- ASAPP Information Group - India
- Kohat Cement Company Ltd. - Pakistan
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- CIMB Investment Bank - Malaysia
- Agrawal Coal Company - India
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