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Tuesday, 04 August 15
SHIPPING CYCLES - A CHESS GAME YOU DON'T WANT TO LOSE - CLARKSONS
 Ingmar Bergman’s classic movie The Seventh Seal is about a knight who, during the Black Death, challenges Death to a chess match, in the hope that while the game continues he can put off his demise. This grim epic could be seen as a metaphor for the daunting progress through long shipping cycles, as one risk-laden move in the toxic chess game follows another.
August 2007 – The Game Starts
Today’s cycle started eight years ago in 2007. It was an epic year. Capesize earnings averaged over $110,000/day and merchant shipbuilding investment reached a record $229 billion (excluding offshore). But there was good reason to be apprehensive. In August the first signs of the financial crisis hit Europe, as interbank investors grew paranoid about the vulnerability of their counterparties to CDO exposure, bringing Eurodollar trading to a halt. Meanwhile analysts were worried that the Chinese super-boom would peak out after the Olympic Games in 2008. So although dry bulk investors were still making money and ordering ships, the solitary chess game with destiny had already started.
Mounting A Comeback
Seven years later the chess game is still going on. The financial crisis got off to a more dramatic start than anyone anticipated. In 2008 as panic swept through financial markets and trade credit became almost unobtainable, the world economy, including China, came precariously close to meltdown. But fortunately this time the politicians eased through the crisis successfully. China mounted a heroic infrastructure programme which gave bulkers a very decent boom in 2009-10. Following this the market fluctuated, but reached decent levels in late 2011 and again in late 2013.
Not Deadly Or Distressed?
As recessions go so far the game with destiny has gone quite well. Since the end of 2007 Capesize earnings have averaged $32,300/day and the market has soaked up 490m dwt of new bulkers. In 2013, 104m dwt of bulkers were ordered. So someone in the industry believed bulkers would win their chess game.
But in 2015 the game changed. Capesize earnings averaged only $6,212/day in the first half. For the first time signs of real distress are apparent. After 8 years, dry bulk sentiment finally collapsed and bulker orders fell from 16m dwt in January 2014 to 0.05m dwt in June 2015. A helpful step towards market recovery, but it leaves the shipyards with a problem. Over the last 8 years bulkers were a third of shipyard workload (see inset pie chart). Although tankers and container ships are still being ordered, they show no sign of filling the gap left by bulkers.
Dance Macabre
So there you have it. Bulkers have finally made a meaningful move towards better times by cutting investment. But the game isn’t over yet. They still need a strong world economy and continued Chinese import growth. Meanwhile a new chess game with destiny is getting started, this time in the shipyards as they try to plug the bulker gap. Maybe the game’s not over yet. So if you want a nice relaxing summer, our advice is don’t watch The Seventh Seal.
Source: Clarksons | Hellenic Shipping News
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Friday, 22 March 24
CASE STUDY: DANGERS OF COAL CARGO - SKULD
Recently, a bulk cargo vessel carrying coal from South Africa to Singapore suffered a fatal accident, resulting in the deaths of three crew members ...
Friday, 22 March 24
INDONESIA APPROVES 922.14 MLN T COAL PRODUCTION QUOTA FOR 2024, ABOVE TARGET - REUTERS
Indonesia has approved coal production quotas totalling 922.14 million metric tons for 2024, Bambang Suswantono, a senior official at the mining mi ...
Friday, 22 March 24
CHINA COAL INDUSTRY GROUP EXPECTS OUTPUT GROWTH TO SLOW IN 2024 - REUTERS
China’s coal output is expected to increase 36 million metric tons, or 0.8%, to about 4.7 billion tonnes in 2024, a Chinese coal industry gro ...
Monday, 18 March 24
THREE KEY TAKEAWAYS FROM OUR EUROPE GAS MARKETS SHORT-TERM OUTLOOK Q1 2024 - WOOD MACKENZIE
European gas prices are currently back to pre-crisis levels, but with a complex series of factors affecting future supply and demand, are they set ...
Wednesday, 06 March 24
INDONESIA AIMS TO FINISH MINING OUTPUT QUOTAS APPROVAL BY END-MARCH, OFFICIAL SAYS - REUTERS
Indonesia’s has approved the mining production quotarequests from more than 120mineral companies and aims to complete the approval process th ...
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- Latin American Coal - Colombia
- MS Steel International - UAE
- Bharathi Cement Corporation - India
- Karbindo Abesyapradhi - Indoneisa
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Lanco Infratech Ltd - India
- Baramulti Group, Indonesia
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Meenaskhi Energy Private Limited - India
- The University of Queensland
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Planning Commission, India
- CNBM International Corporation - China
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- White Energy Company Limited
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Ministry of Finance - Indonesia
- CIMB Investment Bank - Malaysia
- Simpson Spence & Young - Indonesia
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Mercator Lines Limited - India
- Straits Asia Resources Limited - Singapore
- GMR Energy Limited - India
- Uttam Galva Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Australian Coal Association
- Star Paper Mills Limited - India
- Attock Cement Pakistan Limited
- Indonesian Coal Mining Association
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Sidhee Cement - India
- Gujarat Electricity Regulatory Commission - India
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Oldendorff Carriers - Singapore
- OPG Power Generation Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Semirara Mining Corp, Philippines
- San Jose City I Power Corp, Philippines
- South Luzon Thermal Energy Corporation
- Kobexindo Tractors - Indoneisa
- Thai Mozambique Logistica
- Bulk Trading Sa - Switzerland
- Trasteel International SA, Italy
- Deloitte Consulting - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- PowerSource Philippines DevCo
- Makarim & Taira - Indonesia
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Thiess Contractors Indonesia
- Malabar Cements Ltd - India
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Standard Chartered Bank - UAE
- Bangladesh Power Developement Board
- Kohat Cement Company Ltd. - Pakistan
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Indogreen Group - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Vedanta Resources Plc - India
- Indian Energy Exchange, India
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Holcim Trading Pte Ltd - Singapore
- Banpu Public Company Limited - Thailand
- Electricity Authority, New Zealand
- Mjunction Services Limited - India
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement - Thailand
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- IHS Mccloskey Coal Group - USA
- Siam City Cement PLC, Thailand
- Rashtriya Ispat Nigam Limited - India
- Parliament of New Zealand
- Sindya Power Generating Company Private Ltd
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Jindal Steel & Power Ltd - India
- Parry Sugars Refinery, India
- Tamil Nadu electricity Board
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Eastern Coal Council - USA
- Miang Besar Coal Terminal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- GAC Shipping (India) Pvt Ltd
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dalmia Cement Bharat India
- Bhatia International Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ambuja Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Riau Bara Harum - Indonesia
- The State Trading Corporation of India Ltd
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Tata Chemicals Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Price Waterhouse Coopers - Russia
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Ministry of Transport, Egypt
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Bukit Baiduri Energy - Indonesia
- Economic Council, Georgia
- Binh Thuan Hamico - Vietnam
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- PTC India Limited - India
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
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