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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, 18 September 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Thursday, 17 September 20
LAST HOPES FOR DEMAND GROWTH SET TO DISAPPOINT THERMAL COAL EXPORTERS - IEEFA
Asian thermal coal exporters are fighting an uphill battle even in new markets
The world’s largest thermal coal exporter is eyeing new m ...
Wednesday, 16 September 20
MARKET INSIGHT - INTERMODAL
Another active week in terms of SnP has concluded in the dry bulk market with a diversified array of transactions recorded. Despite the correction ...
Friday, 11 September 20
IMO 2020: A REVIEW OF THE TRANSITION TO VLSFOS - GARD
KNOWLEDGE TO ELEVATE
Many predictions were made in the run up to the imposition of the MARPOL 2020 sulphur cap, none of which was that the tra ...
Thursday, 10 September 20
U.S. COAL PRODUCTION IN 2020 TO BE 511 MMST, 28 PER CENT LOWER THAN IN 2019 - EIA
EIA expects total U.S. coal production in 2020 to be 511 million short tons (MMst), 194 MMst (28%) lower than in 2019. Mitigation efforts related t ...
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- PetroVietnam Power Coal Import and Supply Company
- Minerals Council of Australia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Posco Energy - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Marubeni Corporation - India
- Kaltim Prima Coal - Indonesia
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Riau Bara Harum - Indonesia
- Larsen & Toubro Limited - India
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- VISA Power Limited - India
- London Commodity Brokers - England
- Economic Council, Georgia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
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- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Commonwealth Bank - Australia
- San Jose City I Power Corp, Philippines
- Africa Commodities Group - South Africa
- Global Business Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Indian Oil Corporation Limited
- Coalindo Energy - Indonesia
- Mercuria Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- Singapore Mercantile Exchange
- White Energy Company Limited
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Indika Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Gujarat Electricity Regulatory Commission - India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- LBH Netherlands Bv - Netherlands
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wood Mackenzie - Singapore
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Altura Mining Limited, Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Makmur.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- The Treasury - Australian Government
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- PTC India Limited - India
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Kobexindo Tractors - Indoneisa
- Orica Australia Pty. Ltd.
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Latin American Coal - Colombia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Straits Asia Resources Limited - Singapore
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Bayan Resources Tbk. - Indonesia
- Cement Manufacturers Association - India
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Merrill Lynch Commodities Europe
- Semirara Mining Corp, Philippines
- Manunggal Multi Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Formosa Plastics Group - Taiwan
- Makarim & Taira - Indonesia
- Grasim Industreis Ltd - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Bhushan Steel Limited - India
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- Sinarmas Energy and Mining - Indonesia
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- Siam City Cement - Thailand
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- PowerSource Philippines DevCo
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Central Electricity Authority - India
- Karaikal Port Pvt Ltd - India
- Mintek Dendrill Indonesia
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Indonesian Coal Mining Association
- MS Steel International - UAE
- Kohat Cement Company Ltd. - Pakistan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Sarangani Energy Corporation, Philippines
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- The State Trading Corporation of India Ltd
- Simpson Spence & Young - Indonesia
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