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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, 04 January 21
BLISS FOR SHIPOWNERS! DAMAGES MAY BE CLAIMED IN ADDITION TO DEMURRAGE FOR VOYAGE CHARTERPARTY DELAY - WFW
KNOWLEDGE TO ELEVATE
In a significant decision for the maritime sector, The Eternal Bliss[1], the English Commercial Court has resol ...
Sunday, 03 January 21
INDIA: COMMERCE MINISTRY LAUNCHES COAL IMPORT MONITORING SYSTEM - PTI
CIMS shall require importers to submit advance information in an online system for imports of items and obtain an automatic registration number by ...
Wednesday, 30 December 20
A LOOK BACK INTO 2020: THE HEADWINDS, THE TAILWINDS AND EVERYTHING IN BETWEEN - SIGNAL
There is no doubt that 2020 has been a turbulent year for commercial shipping. The coronavirus pandemic has shaken the global maritime transport. T ...
Tuesday, 29 December 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.66 PCT - XINHUA
China Taiyuan coal transaction price index stood at 134.78 points Monday, up 0.66 percent week on week.
The index, released by China ...
Tuesday, 29 December 20
CORROSION-RESISTANT STEELS FOR CARGO OIL TANKS - DNV GL
KNOWLEDGE TO ELEVATE
Crude oil is a complex mixture of substances at varying ratios and in most cases contains at least some salt water. ...
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- PetroVietnam Power Coal Import and Supply Company
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Ministry of Mines - Canada
- Renaissance Capital - South Africa
- Minerals Council of Australia
- Siam City Cement PLC, Thailand
- Bhushan Steel Limited - India
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Central Java Power - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Jindal Steel & Power Ltd - India
- Ceylon Electricity Board - Sri Lanka
- TeaM Sual Corporation - Philippines
- Merrill Lynch Commodities Europe
- Lanco Infratech Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- PTC India Limited - India
- Posco Energy - South Korea
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Bulk Trading Sa - Switzerland
- Vizag Seaport Private Limited - India
- Sical Logistics Limited - India
- Eastern Coal Council - USA
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Leighton Contractors Pty Ltd - Australia
- Toyota Tsusho Corporation, Japan
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Jorong Barutama Greston.PT - Indonesia
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Economic Council, Georgia
- Therma Luzon, Inc, Philippines
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- Grasim Industreis Ltd - India
- Bharathi Cement Corporation - India
- Essar Steel Hazira Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Orica Mining Services - Indonesia
- Edison Trading Spa - Italy
- Electricity Generating Authority of Thailand
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Bhatia International Limited - India
- Coastal Gujarat Power Limited - India
- Mintek Dendrill Indonesia
- Jaiprakash Power Ventures ltd
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Maheswari Brothers Coal Limited - India
- Chamber of Mines of South Africa
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Wilmar Investment Holdings
- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- OPG Power Generation Pvt Ltd - India
- Parliament of New Zealand
- Australian Commodity Traders Exchange
- Karaikal Port Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- South Luzon Thermal Energy Corporation
- Orica Australia Pty. Ltd.
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Timah Investasi Mineral - Indoneisa
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Straits Asia Resources Limited - Singapore
- The University of Queensland
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Africa Commodities Group - South Africa
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Eastern Energy - Thailand
- Pendopo Energi Batubara - Indonesia
- Global Green Power PLC Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Thai Mozambique Logistica
- GN Power Mariveles Coal Plant, Philippines
- Alfred C Toepfer International GmbH - Germany
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Banpu Public Company Limited - Thailand
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Independent Power Producers Association of India
- Ministry of Finance - Indonesia
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- Videocon Industries ltd - India
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Xindia Steels Limited - India
- Standard Chartered Bank - UAE
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Singapore Mercantile Exchange
- Savvy Resources Ltd - HongKong
- Meenaskhi Energy Private Limited - India
- Australian Coal Association
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Global Coal Blending Company Limited - Australia
- Borneo Indobara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- London Commodity Brokers - England
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Mercuria Energy - Indonesia
- Dalmia Cement Bharat India
- Gujarat Mineral Development Corp Ltd - India
- Indian Energy Exchange, India
- Attock Cement Pakistan Limited
- Ambuja Cements Ltd - India
- CNBM International Corporation - China
- Marubeni Corporation - India
- MS Steel International - UAE
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
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