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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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Friday, 04 June 21
NEW COAL-FIRED POWER PLANTS IN INDIA WILL BE ECONOMICALLY UNVIABLE - IEEFA
Coal capacity additions face major stranded asset risk
Much of India’s 33 gigawatts (GW) of coal-fired power capacity currently under co ...
Thursday, 03 June 21
JUNE HBA IS HITTING ABOVE $100 AND SETTLED AT ITS HIGHEST SINCE OCTOBER 2020
COALspot.com: The Indonesia coal price reference for June 2021 settles at US$ 100.33 per ton FOB vessel.
The Indonesia coal pr ...
Wednesday, 02 June 21
INDONESIA RV WAS DOWN TO LOW/MID $20,000S DAY FOR PANAMAX/KAMSARMAX WITH DELIVERY S CHINA - BANCHERO COSTA
Panamax
A softening week in the Pacific basin with rates under a downward pressure mainly caused by the oversupply of tonnage in the area, said ...
Wednesday, 02 June 21
EUROPEAN UNION'S IRON ORE IMPORTS - BANCHERO COSTA
The European Union (27) is currently the fourth largest importer of iron ore in the world, after China, Japan, and South Korea.
Euro ...
Tuesday, 01 June 21
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.02 PCT - XINHUA
China Taiyuan coal transaction price index stood at 160.06 points Monday, down 0.02 percent week on week.
The index, released by Chi ...
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- Bulk Trading Sa - Switzerland
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Coal and Oil Company - UAE
- ASAPP Information Group - India
- Port Waratah Coal Services - Australia
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Lanco Infratech Ltd - India
- Barasentosa Lestari - Indonesia
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Tata Chemicals Ltd - India
- Indogreen Group - Indonesia
- Energy Link Ltd, New Zealand
- AsiaOL BioFuels Corp., Philippines
- CNBM International Corporation - China
- London Commodity Brokers - England
- Sakthi Sugars Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Kideco Jaya Agung - Indonesia
- Minerals Council of Australia
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Mercuria Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Attock Cement Pakistan Limited
- Global Green Power PLC Corporation, Philippines
- Meralco Power Generation, Philippines
- Latin American Coal - Colombia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Maharashtra Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Riau Bara Harum - Indonesia
- Central Java Power - Indonesia
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- SMG Consultants - Indonesia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- PTC India Limited - India
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Kohat Cement Company Ltd. - Pakistan
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- SMC Global Power, Philippines
- Timah Investasi Mineral - Indoneisa
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- India Bulls Power Limited - India
- Aditya Birla Group - India
- Dalmia Cement Bharat India
- Sarangani Energy Corporation, Philippines
- Baramulti Group, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Xindia Steels Limited - India
- Price Waterhouse Coopers - Russia
- TNB Fuel Sdn Bhd - Malaysia
- Binh Thuan Hamico - Vietnam
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- VISA Power Limited - India
- Star Paper Mills Limited - India
- CIMB Investment Bank - Malaysia
- GMR Energy Limited - India
- Holcim Trading Pte Ltd - Singapore
- Sojitz Corporation - Japan
- Renaissance Capital - South Africa
- Samtan Co., Ltd - South Korea
- Africa Commodities Group - South Africa
- Kapuas Tunggal Persada - Indonesia
- Carbofer General Trading SA - India
- Indika Energy - Indonesia
- Parliament of New Zealand
- Malabar Cements Ltd - India
- Goldman Sachs - Singapore
- Orica Australia Pty. Ltd.
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- European Bulk Services B.V. - Netherlands
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Power Finance Corporation Ltd., India
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Georgia Ports Authority, United States
- Offshore Bulk Terminal Pte Ltd, Singapore
- Mintek Dendrill Indonesia
- Sinarmas Energy and Mining - Indonesia
- Jindal Steel & Power Ltd - India
- Posco Energy - South Korea
- MS Steel International - UAE
- Marubeni Corporation - India
- Therma Luzon, Inc, Philippines
- Bhatia International Limited - India
- Tamil Nadu electricity Board
- Heidelberg Cement - Germany
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Central Electricity Authority - India
- Planning Commission, India
- Ministry of Mines - Canada
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Australian Commodity Traders Exchange
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Kumho Petrochemical, South Korea
- Kepco SPC Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Australian Coal Association
- Singapore Mercantile Exchange
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
- Larsen & Toubro Limited - India
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Madhucon Powers Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- The University of Queensland
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Petrochimia International Co. Ltd.- Taiwan
- San Jose City I Power Corp, Philippines
- Economic Council, Georgia
- TeaM Sual Corporation - Philippines
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