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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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Thursday, 17 September 15
LOW DEMAND PUSH COAL SWAP DOWN
COALspot.com: Indonesian coal swap for delivery 4Q 2015 declined month on month and gain week over week.
The 4Q swap declined $ 1.77 (-4.17%) ...
Thursday, 17 September 15
MARKET INSIGHT - KONSTANTINOS KONTOMICHIS
Having experienced, as it was much anticipated, a poor 1st half combined with negative forecasts, summer, in sharp contrast, proved to be more hope ...
Wednesday, 16 September 15
SLOWER GROWTH IN WORLD COAL DEMAND AND LOWER INTERNATIONAL COAL PRICES LED A DECLINE IN INDONESIAN COAL PRODUCTION
COALspot.com: Slower growth in world coal demand particularly China and lower international coal prices have led to a decline in Indonesian coal pr ...
Wednesday, 16 September 15
HIGHER TAXES COULD LEAD GREEK SHIP OWNERS OUT OF THE COUNTRY - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
A potential taxation overhaul of the shipping industry in Hellas, which could see the loss of particular tax benefits for ship owners, could lead t ...
Tuesday, 15 September 15
WORLD SEABORNE TRADE: ENTERING INTO A ROLE REVERSAL? - CLARKSONS
Over the past decade, world seaborne trade growth has been dominated by dry bulk and container trade. However, developments in the global economy t ...
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- Planning Commission, India
- OPG Power Generation Pvt Ltd - India
- SMC Global Power, Philippines
- GVK Power & Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Semirara Mining Corp, Philippines
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Medco Energi Mining Internasional
- White Energy Company Limited
- Gujarat Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Siam City Cement - Thailand
- Australian Coal Association
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Kumho Petrochemical, South Korea
- Videocon Industries ltd - India
- Jindal Steel & Power Ltd - India
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- MS Steel International - UAE
- Mercator Lines Limited - India
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- Jorong Barutama Greston.PT - Indonesia
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Banpu Public Company Limited - Thailand
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Bhatia International Limited - India
- Attock Cement Pakistan Limited
- San Jose City I Power Corp, Philippines
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Coal Blending Company Limited - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Sinarmas Energy and Mining - Indonesia
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Iligan Light & Power Inc, Philippines
- Petron Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Global Green Power PLC Corporation, Philippines
- Trasteel International SA, Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Leighton Contractors Pty Ltd - Australia
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- GMR Energy Limited - India
- Central Electricity Authority - India
- Malabar Cements Ltd - India
- ICICI Bank Limited - India
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- AsiaOL BioFuels Corp., Philippines
- Indian Energy Exchange, India
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Coalindo Energy - Indonesia
- Sree Jayajothi Cements Limited - India
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Posco Energy - South Korea
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Timah Investasi Mineral - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Kartika Selabumi Mining - Indonesia
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- CIMB Investment Bank - Malaysia
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- PowerSource Philippines DevCo
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Binh Thuan Hamico - Vietnam
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- Carbofer General Trading SA - India
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Coastal Gujarat Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Price Waterhouse Coopers - Russia
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Orica Mining Services - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Minerals Council of Australia
- The University of Queensland
- SMG Consultants - Indonesia
- Oldendorff Carriers - Singapore
- Wood Mackenzie - Singapore
- Orica Australia Pty. Ltd.
- Edison Trading Spa - Italy
- Maheswari Brothers Coal Limited - India
- Toyota Tsusho Corporation, Japan
- TNB Fuel Sdn Bhd - Malaysia
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Baramulti Group, Indonesia
- Mjunction Services Limited - India
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Straits Asia Resources Limited - Singapore
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sakthi Sugars Limited - India
- Bulk Trading Sa - Switzerland
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Heidelberg Cement - Germany
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aboitiz Power Corporation - Philippines
- Samtan Co., Ltd - South Korea
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Independent Power Producers Association of India
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- ASAPP Information Group - India
- Ministry of Transport, Egypt
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Borneo Indobara - Indonesia
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Standard Chartered Bank - UAE
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Electricity Authority, New Zealand
- Parry Sugars Refinery, India
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