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Wednesday, 09 June 21
MARKET INSIGHT - INTERMODAL
 “Counter cyclical investments.” usually take place by investing in a “bad” market at the point that ensures that the acquired asset exposes the buyer less. This has always been the essence of investing in most industries. Of course, like everything else, it’s is easier said than done when a market is going through a trough. Apart from the purchase cost, you still have to spend money in order to subsidize the asset until the market recovers. And of course, there is always the question of whether the market has reached a bottom or not. Anyway, all of these are known.
So now that we are experiencing a bullish dry bulk market and a phenomenal container market, it might be logical to speculate that tankers are not far behind on their way to recovery. With that said, investing in tankers is the only counter cyclical move you could do today at least within the 3 vanilla sectors.
Currently, the tanker market continues to remain weak on the back of constrained oil supply from OPEC+, but last year’s record high crude oil inventories have drawn down extensively, currently are at the bottom of the 5 year average range. At the same time, oil demand is set to recover signaling that the tanker trough might be hopefully ending. Goldman Sachs projects oil demand to increase by +5.0 million barrels per day over the next 6 months, with this summer particularly likely to witness the biggest ever oil demand increase. Additional oil supplies will need to flow into the market; OPEC+ has already decided to gradually increase production through July. A favorable scenario would dictate a further increase in OPEC+ supply by Q4, even if Iranian barrels return to the market, in order to cope with the demand.
But up to this date, despite a lackluster tanker freight market, asset values have increased as underlying steel prices have reached record high levels providing support. The increase in tanker asset values has been more pronounced for younger units, where the majority of SnP interest lies, rather than older ones.
Since January, approximately 124 tankers have changed hands, with the majority being AFRAs (58), followed by VLCCs (41) and SUEZMAXs (25). It makes sense for shipowners to look into buying second hand crude ships purely out of speculation as a tanker recovery is well overdue. The majority of the ships sold were in the 13-17 years age bracket, mostly due to high supply of candidates (e.g. approx. 38% of the Aframax fleet is above 15Y Old). It is certain that a lot of buyers bidding on 12-13 year ships would also go after 10Y or 8Y old tonnage if there was availability.
Recently, we have seen an increase in interest for ships built in after 2010 and almost no interest for older ships with the asset value gains shaped accordingly. Indicatively, 10Y old Aframax values are estimated to have increased by +27.0% since Q4 2020, while 15Y old values have only gained +14.0% over the same period. It might make sense to assume that since the anticipated recovery is yet to be seen, buyers are not willing to risk it on older ships. But given what we are currently witnessing on the dry and box sectors is this wise?
We see 10-15 year old container ships that a year ago might have being sold at demolition levels now being fixed for 4-5 years in the low 40k for further trading. We are witnessing the so called obsolete 28k handy fetching above 20k p/d. Although the tanker regulatory environment, makes older crude tankers less competitive in traditional trades where oil majors are involved even in a tanker recovery, the 15Y Old to 5Y old ratio at this point being at approx. 40% (the lowest we have seen is 30% during 2013 and the highest 60% during 2009) might be enticing enough to invest into an older asset and take advantage of a broader tanker market recovery in the near future. In other words, even older units can benefit in a market recovery.
As in the famous quote “A rising tide lifts all boats.”
By Timos Papadimitriou,
SnP Broker
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 June 21
INDONESIA COAL EARNINGS RECOVERY TO SLOW AFTER STRONG 1Q - FITCH RATINGS
Fitch Ratings expects the recovery in operating and financial performance of Indonesian coal miners and coal contractors to slow during rest of 202 ...
Thursday, 10 June 21
U.S. COAL PRODUCTION TO TOTAL 600 MMST IN 2021, 11% MORE THAN IN 2020 - EIA
EIA expects U.S. coal production to total 600 million short tons (MMst) in 2021, which is 61 MMst (11%) more than in 2020.
The increase is dri ...
Wednesday, 09 June 21
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
The In-Person Maritime Event
SHIPTEK INTERNATIONAL CONFERENCE & AWARDS 2021
culminates successfully in Dubai
Press Release: ...
Saturday, 05 June 21
KOMIPO INVITED 5600 NAR COAL OFFERS FOR THREE YEARS SUPPLY; 520,000 MT PER YEAR
COALspot.com: Korea Midland Power Co., Ltd (KOMIPO) has issued an international tender for total 1,560,000 MT of Bituminous Coal to be used a ...
Saturday, 05 June 21
IT'S TIME FOR THE BIDEN ADMINISTRATION TO CHAMPION RENEWABLE ENERGY IN THE PHILIPPINES, NOT NUCLEAR OR FOSSIL GAS - IEEFA
Fossil gas and nuclear investments risk locking in costly, outdated infrastructure for the long-term
The United States has spent the ...
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- Energy Link Ltd, New Zealand
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- Barasentosa Lestari - Indonesia
- Trasteel International SA, Italy
- Dalmia Cement Bharat India
- Jindal Steel & Power Ltd - India
- Siam City Cement - Thailand
- White Energy Company Limited
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- Rashtriya Ispat Nigam Limited - India
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Simpson Spence & Young - Indonesia
- London Commodity Brokers - England
- PNOC Exploration Corporation - Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- Electricity Generating Authority of Thailand
- CIMB Investment Bank - Malaysia
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- ASAPP Information Group - India
- Economic Council, Georgia
- Savvy Resources Ltd - HongKong
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- GAC Shipping (India) Pvt Ltd
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Heidelberg Cement - Germany
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- Malabar Cements Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Electricity Authority, New Zealand
- Ministry of Finance - Indonesia
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- Metalloyd Limited - United Kingdom
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- New Zealand Coal & Carbon
- PTC India Limited - India
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Marubeni Corporation - India
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Indian Oil Corporation Limited
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kepco SPC Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- Lanco Infratech Ltd - India
- Gujarat Sidhee Cement - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Coal and Oil Company - UAE
- Posco Energy - South Korea
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Antam Resourcindo - Indonesia
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Rio Tinto Coal - Australia
- Bhushan Steel Limited - India
- Bhoruka Overseas - Indonesia
- Tata Chemicals Ltd - India
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Global Coal Blending Company Limited - Australia
- Ceylon Electricity Board - Sri Lanka
- Bangladesh Power Developement Board
- Port Waratah Coal Services - Australia
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- Mjunction Services Limited - India
- Pendopo Energi Batubara - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Planning Commission, India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Ind-Barath Power Infra Limited - India
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Vizag Seaport Private Limited - India
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Sakthi Sugars Limited - India
- Meenaskhi Energy Private Limited - India
- Timah Investasi Mineral - Indoneisa
- Grasim Industreis Ltd - India
- Indian Energy Exchange, India
- The Treasury - Australian Government
- Deloitte Consulting - India
- Jaiprakash Power Ventures ltd
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Kideco Jaya Agung - Indonesia
- Indika Energy - Indonesia
- Renaissance Capital - South Africa
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Sinarmas Energy and Mining - Indonesia
- Wood Mackenzie - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Attock Cement Pakistan Limited
- SMG Consultants - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Sical Logistics Limited - India
- Edison Trading Spa - Italy
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Goldman Sachs - Singapore
- GMR Energy Limited - India
- Chamber of Mines of South Africa
- Sojitz Corporation - Japan
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Global Business Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
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