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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, 10 September 20
DRY BULK SHIPPING: CHINA'S DEMAND KEEPING THE DRY BULK MARKET GOING - PETER SAND | BIMCO
Overview
An impressive recovery in Chinese dry bulk imports has protected the industry from the effects of falling demand in the rest of the wo ...
Thursday, 10 September 20
TANKER SHIPPING: FREIGHT RATES BACK AT LOSS-MAKING LEVELS AFTER 12 VERY PROFITABLE MONTHS - BIMCO
Overview
A stunningly strong 12 months for the tanker shipping industry is now being replaced by lower freight rates, as lower oil product ...
Thursday, 10 September 20
INDIA'S COAL IMPORTS STUMBLE IN AUGUST, RAISING RISK OF SLOW RECOVERY - REFINITIV | BANCHERO COSTA
After posting a mild recovery in July, India's coal imports have stumbled in August as the South Asian nation battles to restart it ...
Thursday, 10 September 20
THE FIRST 8 MONTHS OF 2020, INDONESIA EXPORTED 217.4 MLN TONNES OF COAL BASED ON REFINITIV - BANCHERO COSTA
The coal market has been hit by a weaker global economy as a result of COVID-19 pandemic and falling industrial electricity demand ...
Wednesday, 09 September 20
MARKET INSIGHT - INTERMODAL
The uneventful summer lull which is coming to an end soon has left its stigma on the newbuilding market, which has already been devastated by the g ...
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- Karbindo Abesyapradhi - Indoneisa
- The University of Queensland
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- TeaM Sual Corporation - Philippines
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Mercuria Energy - Indonesia
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Eastern Energy - Thailand
- Samtan Co., Ltd - South Korea
- Siam City Cement - Thailand
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Petron Corporation, Philippines
- Indogreen Group - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Wilmar Investment Holdings
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- European Bulk Services B.V. - Netherlands
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
- Lanco Infratech Ltd - India
- Cement Manufacturers Association - India
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- White Energy Company Limited
- Energy Development Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Australian Coal Association
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Indika Energy - Indonesia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- PetroVietnam Power Coal Import and Supply Company
- Simpson Spence & Young - Indonesia
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Vijayanagar Sugar Pvt Ltd - India
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Metalloyd Limited - United Kingdom
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- IEA Clean Coal Centre - UK
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GMR Energy Limited - India
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Barasentosa Lestari - Indonesia
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Australian Commodity Traders Exchange
- Anglo American - United Kingdom
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- India Bulls Power Limited - India
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhushan Steel Limited - India
- Singapore Mercantile Exchange
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- Interocean Group of Companies - India
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Electricity Authority, New Zealand
- LBH Netherlands Bv - Netherlands
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Sakthi Sugars Limited - India
- Madhucon Powers Ltd - India
- Savvy Resources Ltd - HongKong
- Ministry of Transport, Egypt
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Agrawal Coal Company - India
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- San Jose City I Power Corp, Philippines
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Star Paper Mills Limited - India
- Kobexindo Tractors - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Siam City Cement PLC, Thailand
- Formosa Plastics Group - Taiwan
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- ICICI Bank Limited - India
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- CIMB Investment Bank - Malaysia
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Grasim Industreis Ltd - India
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- Orica Mining Services - Indonesia
- Economic Council, Georgia
- Wood Mackenzie - Singapore
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Kaltim Prima Coal - Indonesia
- New Zealand Coal & Carbon
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Deloitte Consulting - India
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- PTC India Limited - India
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Mintek Dendrill Indonesia
- Videocon Industries ltd - India
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