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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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Wednesday, 24 November 21
WHY THIS MINING ANALYST IS UPBEAT ON THE IRON ORE PRICE FORECAST - MOTLEY FOOL
In many ways, 2021 can be called the year of the iron ore price. Much of the talk of the ASX town this year has revolved around this key economic m ...
Wednesday, 24 November 21
PRICE OF CHINA’S COAL FUTURE DROPS BY 60% AS NATIONWIDE DAILY OUTPUT REACHES OVER 12 MILLION TONS: NDRC - GLOBAL TIMES
China’s daily coal output has now stabilized after reaching over 12 million tons and the price of coal futures has declined to 800 yuan ($125 ...
Friday, 19 November 21
CHINA: COAL SUPPLIES TO STABILIZE FOR COMING COLD SEASON
China is capable of ensuring stable coal supplies this winter and next spring with the increase in coal production and the rising stockpiles at pow ...
Wednesday, 17 November 21
MARKET INSIGHT - INTERMODAL
It has been another declining week for the dry bulk market and evidently, we are seeing asset values gradually losing momentum as well. Following a ...
Tuesday, 16 November 21
EARNINGS RECOVERY IN INDONESIAN COAL TO CONTINUE THROUGH 2021, BUT SLOW IN 2022 - FITCH RATINGS
The recovery in the operating and financial performance of Indonesian coal miners and coal contractors is likely to slow in 2022, but coal prices s ...
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- Jindal Steel & Power Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Directorate General of MIneral and Coal - Indonesia
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Manunggal Multi Energi - Indonesia
- Commonwealth Bank - Australia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- London Commodity Brokers - England
- Energy Link Ltd, New Zealand
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Trasteel International SA, Italy
- Mintek Dendrill Indonesia
- Formosa Plastics Group - Taiwan
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- LBH Netherlands Bv - Netherlands
- Thai Mozambique Logistica
- Singapore Mercantile Exchange
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- PTC India Limited - India
- Ministry of Mines - Canada
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- CIMB Investment Bank - Malaysia
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Toyota Tsusho Corporation, Japan
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- Oldendorff Carriers - Singapore
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Africa Commodities Group - South Africa
- Ambuja Cements Ltd - India
- Savvy Resources Ltd - HongKong
- Sinarmas Energy and Mining - Indonesia
- White Energy Company Limited
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jaiprakash Power Ventures ltd
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Kaltim Prima Coal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Sree Jayajothi Cements Limited - India
- Power Finance Corporation Ltd., India
- Port Waratah Coal Services - Australia
- Thiess Contractors Indonesia
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Indonesian Coal Mining Association
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Cigading International Bulk Terminal - Indonesia
- Uttam Galva Steels Limited - India
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Agrawal Coal Company - India
- Independent Power Producers Association of India
- Central Electricity Authority - India
- Kapuas Tunggal Persada - Indonesia
- Sical Logistics Limited - India
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Electricity Generating Authority of Thailand
- IEA Clean Coal Centre - UK
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Cement Manufacturers Association - India
- Sindya Power Generating Company Private Ltd
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Siam City Cement PLC, Thailand
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Parliament of New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Lanco Infratech Ltd - India
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- Anglo American - United Kingdom
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indika Energy - Indonesia
- Vedanta Resources Plc - India
- Bulk Trading Sa - Switzerland
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Madhucon Powers Ltd - India
- Coal and Oil Company - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- IHS Mccloskey Coal Group - USA
- Leighton Contractors Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Georgia Ports Authority, United States
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- TNB Fuel Sdn Bhd - Malaysia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Meralco Power Generation, Philippines
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- VISA Power Limited - India
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Price Waterhouse Coopers - Russia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Kartika Selabumi Mining - Indonesia
- Indian Oil Corporation Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Malabar Cements Ltd - India
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Iligan Light & Power Inc, Philippines
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Minerals Council of Australia
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Larsen & Toubro Limited - India
- Ind-Barath Power Infra Limited - India
- Bhushan Steel Limited - India
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wood Mackenzie - Singapore
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