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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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Monday, 11 October 21
COAL ABANDONMENT IN POWER GENERATION PROMOTED GAS DEMAND GROWTH IN EUROPE - TOP MANAGER: TASS
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led t ...
Saturday, 09 October 21
CHINA POWER CUTS: COAL MINERS ORDERED TO BOOST OUTPUT, SAY REPORTS - BBC
Beijing has reportedly ordered China’s coal mines to boost output as an energy shortage across the country has seen millions of homes and bus ...
Friday, 08 October 21
SEPTEMBER CRUDE OIL TANKER DEMOLISHING HITS 39-MONTHS HIGH AT 1.9M DWT - PETER SAND
Has the lid finally come off for crude oil tanker demolition in 2021? If judged by the 1.9m DWT of capacity that was removed in September, the answ ...
Friday, 08 October 21
COAL SHORTAGE MAY LEAD TO RISE IN STEEL PRICES IN COMING MONTHS: JSPL MD - PTI
Steel prices are expected to increase in the coming months as companies are buying coal at three times the rates a month ago, said a top industry e ...
Wednesday, 06 October 21
INDONESIA COAL PRICE REFERENCE: ANOTHER MONTH, ANOTHER RALLY
COALspot.com: Indonesian Coal Price Reference in a steep climb for most of second and third quarters of 2021 as it reached a pinnacle of $161.63 Oc ...
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- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
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- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- Chamber of Mines of South Africa
- Malabar Cements Ltd - India
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- Semirara Mining and Power Corporation, Philippines
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- Jaiprakash Power Ventures ltd
- Formosa Plastics Group - Taiwan
- Meenaskhi Energy Private Limited - India
- Central Electricity Authority - India
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- Bharathi Cement Corporation - India
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
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- Iligan Light & Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Xindia Steels Limited - India
- Vizag Seaport Private Limited - India
- Bukit Makmur.PT - Indonesia
- Coalindo Energy - Indonesia
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
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- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
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- Intertek Mineral Services - Indonesia
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- Directorate Of Revenue Intelligence - India
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- Indian Oil Corporation Limited
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- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- McConnell Dowell - Australia
- Energy Development Corp, Philippines
- Eastern Coal Council - USA
- Africa Commodities Group - South Africa
- Ministry of Mines - Canada
- Carbofer General Trading SA - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Semirara Mining Corp, Philippines
- CIMB Investment Bank - Malaysia
- The University of Queensland
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- Independent Power Producers Association of India
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- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Bangladesh Power Developement Board
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- OPG Power Generation Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- VISA Power Limited - India
- Goldman Sachs - Singapore
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Petron Corporation, Philippines
- Marubeni Corporation - India
- ICICI Bank Limited - India
- Savvy Resources Ltd - HongKong
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Wilmar Investment Holdings
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mercator Lines Limited - India
- Sical Logistics Limited - India
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Coal and Oil Company - UAE
- Meralco Power Generation, Philippines
- Economic Council, Georgia
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Essar Steel Hazira Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Eastern Energy - Thailand
- Power Finance Corporation Ltd., India
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Georgia Ports Authority, United States
- Bukit Asam (Persero) Tbk - Indonesia
- Indonesian Coal Mining Association
- Energy Link Ltd, New Zealand
- Orica Mining Services - Indonesia
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- Ministry of Transport, Egypt
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- SN Aboitiz Power Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Rashtriya Ispat Nigam Limited - India
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Sarangani Energy Corporation, Philippines
- Gujarat Sidhee Cement - India
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- India Bulls Power Limited - India
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- New Zealand Coal & Carbon
- Australian Commodity Traders Exchange
- Bhushan Steel Limited - India
- Grasim Industreis Ltd - India
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Bayan Resources Tbk. - Indonesia
- Parliament of New Zealand
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- Ministry of Finance - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
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- Trasteel International SA, Italy
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Port Waratah Coal Services - Australia
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Kumho Petrochemical, South Korea
- Madhucon Powers Ltd - India
- GMR Energy Limited - India
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Commonwealth Bank - Australia
- Edison Trading Spa - Italy
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