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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, 04 November 21
FASTER DECARBONISATION: BACK TO BASICS FOR THE MINING INDUSTRY? - WOOD MACKENZIE
To the uninitiated, rugby is a technical and complicated game. As young schoolboys it was all a wee bit confusing and we invariably ended up on the ...
Wednesday, 03 November 21
CHINA TO LAUNCH NEW DATA MONITORING SYSTEM, TARGETING COAL MARKET SPECULATION, HOARDING - GLOBAL TIMES
China’s top economic planner announced on Sunday a new data system for supervising the implementation of medium- and long-term contracts of c ...
Wednesday, 03 November 21
CHINA’S STATE PLANNER SAYS COAL SUPPLY IMPROVING, PRICES STABILISING - REUTERS
China’s coal supply situation has seen significant improvement with joint efforts from coal producers, logistics and downstream users, while ...
Wednesday, 03 November 21
HIGHER COKING COAL PRICES TO PARE PROFITABILITY OF STEELMAKERS IN SECOND HALF OF FY22 - CRISIL RATINGS
The operating margin of primary steelmakers will reduce by a third to 24-26% in the second half of this fiscal versus the first half as input cost ...
Wednesday, 03 November 21
MARKET INSIGHT - INTERMODAL
November is here and soon the all time seasonal favorite “all I want or Christmas is you” by Mariah Carey will be played in radio stati ...
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- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- Independent Power Producers Association of India
- Energy Development Corp, Philippines
- The University of Queensland
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Medco Energi Mining Internasional
- Mercuria Energy - Indonesia
- Global Coal Blending Company Limited - Australia
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Barasentosa Lestari - Indonesia
- LBH Netherlands Bv - Netherlands
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Eastern Energy - Thailand
- International Coal Ventures Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Petron Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- MS Steel International - UAE
- Gujarat Sidhee Cement - India
- Bahari Cakrawala Sebuku - Indonesia
- South Luzon Thermal Energy Corporation
- Jaiprakash Power Ventures ltd
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Dalmia Cement Bharat India
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Central Electricity Authority - India
- Siam City Cement - Thailand
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Chettinad Cement Corporation Ltd - India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jindal Steel & Power Ltd - India
- Salva Resources Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Bhatia International Limited - India
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Australian Commodity Traders Exchange
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Bhushan Steel Limited - India
- Agrawal Coal Company - India
- Economic Council, Georgia
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Metalloyd Limited - United Kingdom
- Anglo American - United Kingdom
- Riau Bara Harum - Indonesia
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- GVK Power & Infra Limited - India
- Aditya Birla Group - India
- Edison Trading Spa - Italy
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Tamil Nadu electricity Board
- London Commodity Brokers - England
- Global Business Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Miang Besar Coal Terminal - Indonesia
- Borneo Indobara - Indonesia
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Leighton Contractors Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- San Jose City I Power Corp, Philippines
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- European Bulk Services B.V. - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Sical Logistics Limited - India
- Minerals Council of Australia
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Rio Tinto Coal - Australia
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Indika Energy - Indonesia
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Chamber of Mines of South Africa
- Kobexindo Tractors - Indoneisa
- Toyota Tsusho Corporation, Japan
- PetroVietnam Power Coal Import and Supply Company
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Electricity Authority, New Zealand
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Vedanta Resources Plc - India
- Simpson Spence & Young - Indonesia
- Ministry of Finance - Indonesia
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- VISA Power Limited - India
- Videocon Industries ltd - India
- Mjunction Services Limited - India
- Oldendorff Carriers - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Sree Jayajothi Cements Limited - India
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Energy Link Ltd, New Zealand
- Price Waterhouse Coopers - Russia
- Savvy Resources Ltd - HongKong
- PTC India Limited - India
- The Treasury - Australian Government
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Sinarmas Energy and Mining - Indonesia
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