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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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Tuesday, 07 December 21
COAL FIRMS SEE SHARE PRICES SURGE MONDAY, AFTER GOVERNMENT READJUSTS CONTRACT PRICES - GLOBAL TIMES
Share prices of China’s coal enterprises jumped on Monday on the A-share market following a nationwide adjustment to annual thermal coal pric ...
Monday, 06 December 21
CHINA SETS 2022 ANNUAL THERMAL COAL PRICES AT 700 YUAN/T - MEDIA: REUTERS
China’s top economic planner has proposed to set annual thermal coal prices for 2022 at between 550 yuan and 850 yuan ($86-$133) per tonne, a ...
Thursday, 02 December 21
BUMI RECORDED US$ 666.18 MILLION AS REVENUE IN THE 3RD QUARTER, UP 13.31% YOY
PT Bumi Resources Tbk and its subsidiaries have recorded a surge in revenue in the third quarter of 2021. BUMI has recorded US$ 666.18 million as r ...
Thursday, 02 December 21
CHINA'S COAL CRUNCH IS OVER, BUT PRICES ARE STILL TOO HIGH - REUTERS
China’s coal crisis has largely been resolved with gains in both production and stockpiles sufficient to ensure power supplies over winter.
...
Wednesday, 01 December 21
2022 OUTLOOK: INDONESIAN COAL MINING - FITCH RATINGS
Fitch Ratings has a neutral outlook on the Indonesian coal sector for 2022.
Earnings generation should slow down as selling pr ...
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- Borneo Indobara - Indonesia
- Malabar Cements Ltd - India
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Xindia Steels Limited - India
- Samtan Co., Ltd - South Korea
- Merrill Lynch Commodities Europe
- GVK Power & Infra Limited - India
- Barasentosa Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Petrochimia International Co. Ltd.- Taiwan
- Ind-Barath Power Infra Limited - India
- The State Trading Corporation of India Ltd
- Aboitiz Power Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Ambuja Cements Ltd - India
- Port Waratah Coal Services - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ASAPP Information Group - India
- Commonwealth Bank - Australia
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Mintek Dendrill Indonesia
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Vedanta Resources Plc - India
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- European Bulk Services B.V. - Netherlands
- Indian Oil Corporation Limited
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Jaiprakash Power Ventures ltd
- Savvy Resources Ltd - HongKong
- Eastern Coal Council - USA
- Bharathi Cement Corporation - India
- Global Business Power Corporation, Philippines
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Indian Energy Exchange, India
- Grasim Industreis Ltd - India
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Wood Mackenzie - Singapore
- OPG Power Generation Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Heidelberg Cement - Germany
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Georgia Ports Authority, United States
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- Planning Commission, India
- Australian Coal Association
- Lanco Infratech Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- CNBM International Corporation - China
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Directorate Of Revenue Intelligence - India
- Meenaskhi Energy Private Limited - India
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Sakthi Sugars Limited - India
- Deloitte Consulting - India
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- PTC India Limited - India
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- TeaM Sual Corporation - Philippines
- Antam Resourcindo - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Semirara Mining and Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Karaikal Port Pvt Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Petron Corporation, Philippines
- Siam City Cement PLC, Thailand
- Bhatia International Limited - India
- GMR Energy Limited - India
- Therma Luzon, Inc, Philippines
- Parliament of New Zealand
- Wilmar Investment Holdings
- Australian Commodity Traders Exchange
- Trasteel International SA, Italy
- Mjunction Services Limited - India
- New Zealand Coal & Carbon
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Medco Energi Mining Internasional
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Globalindo Alam Lestari - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Australia Pty. Ltd.
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- Thai Mozambique Logistica
- Minerals Council of Australia
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Iligan Light & Power Inc, Philippines
- London Commodity Brokers - England
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Kohat Cement Company Ltd. - Pakistan
- Indogreen Group - Indonesia
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Thiess Contractors Indonesia
- IEA Clean Coal Centre - UK
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Bulk Trading Sa - Switzerland
- Baramulti Group, Indonesia
- Edison Trading Spa - Italy
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Bangladesh Power Developement Board
- Posco Energy - South Korea
- Makarim & Taira - Indonesia
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- CIMB Investment Bank - Malaysia
- Carbofer General Trading SA - India
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Vizag Seaport Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Banpu Public Company Limited - Thailand
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