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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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Thursday, 24 September 20
SUPRAMAX: INDO TO INDIA FIXING AROUND US$13,000 - FEARNLEYS
Cape
Over the last week the iron ore segment from Brazil to China has picked up, and we see freight rates up USD 2 (12%) week on week Fearnleys ...
Thursday, 24 September 20
KOREA MIDLAND POWER TO BUY 1.92 MILLION TONS OF 4,300-4,700 NCV COAL FOR THREE YEARS
COALspot.com: Korea Midland Power Co. Ltd, has issued an International tender for 640,000 MT 4,300-4,700 kcal/kg NCV coal per year.
...
Wednesday, 23 September 20
VIETNAM'S NEW POWER DEVELOPMENT PLAN MUST OPTIMIZE RENEWABLES AND AVOID FOSSIL FUEL LOCK-IN: IEEFA
EVN’s financial constraints leaves the utility with little room for error
Implementing Vietnam’s soon-to-be-launched next Power De ...
Wednesday, 23 September 20
MARKET INSIGHT - INTERMODAL
Undoubtedly, this year (ongoing) will never be forgotten because in a matter of months it has managed to severely affect and shape our day to day p ...
Friday, 18 September 20
INDIA'S COAL-FIRED POWER OUTPUT PICKS UP AS INDUSTRIAL USE RISES - REUTERS
India’s coal-fired electricity generation rose 9.4% in the first half of September, provisional government data showed, as demand from indust ...
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- Barasentosa Lestari - Indonesia
- Price Waterhouse Coopers - Russia
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Anglo American - United Kingdom
- The Treasury - Australian Government
- Australian Coal Association
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Minerals Council of Australia
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Baramulti Group, Indonesia
- The University of Queensland
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- IHS Mccloskey Coal Group - USA
- McConnell Dowell - Australia
- Tamil Nadu electricity Board
- TeaM Sual Corporation - Philippines
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Authority, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- MS Steel International - UAE
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Indogreen Group - Indonesia
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Planning Commission, India
- Interocean Group of Companies - India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Kumho Petrochemical, South Korea
- VISA Power Limited - India
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Central Electricity Authority - India
- Grasim Industreis Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Wood Mackenzie - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Straits Asia Resources Limited - Singapore
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Development Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Central Java Power - Indonesia
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Coal and Oil Company - UAE
- Commonwealth Bank - Australia
- Ind-Barath Power Infra Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- PTC India Limited - India
- Bhoruka Overseas - Indonesia
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Semirara Mining Corp, Philippines
- Sojitz Corporation - Japan
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Maheswari Brothers Coal Limited - India
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Rio Tinto Coal - Australia
- Maharashtra Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- San Jose City I Power Corp, Philippines
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Energy Link Ltd, New Zealand
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Kideco Jaya Agung - Indonesia
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- Sakthi Sugars Limited - India
- Mjunction Services Limited - India
- AsiaOL BioFuels Corp., Philippines
- Standard Chartered Bank - UAE
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Makarim & Taira - Indonesia
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- Bangladesh Power Developement Board
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Altura Mining Limited, Indonesia
- Jindal Steel & Power Ltd - India
- India Bulls Power Limited - India
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Binh Thuan Hamico - Vietnam
- OPG Power Generation Pvt Ltd - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Ministry of Mines - Canada
- Singapore Mercantile Exchange
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Pipit Mutiara Jaya. PT, Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Videocon Industries ltd - India
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Bhatia International Limited - India
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Ministry of Finance - Indonesia
- Indo Tambangraya Megah - Indonesia
- Rashtriya Ispat Nigam Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Bukit Asam (Persero) Tbk - Indonesia
- Attock Cement Pakistan Limited
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Miang Besar Coal Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Simpson Spence & Young - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Metalloyd Limited - United Kingdom
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Borneo Indobara - Indonesia
- Vizag Seaport Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Cement Manufacturers Association - India
- Aboitiz Power Corporation - Philippines
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
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