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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 $6,212/day in the first half. For the first time signs of real distress are apparent. After 8 years, dry bulk sentiment finally collapsed and bulker orders fell from 16m dwt in January 2014 to 0.05m dwt in June 2015. A helpful step towards market recovery, but it leaves the shipyards with a problem. Over the last 8 years bulkers were a third of shipyard workload (see inset pie chart). Although tankers and container ships are still being ordered, they show no sign of filling the gap left by bulkers.
Dance Macabre
So there you have it. Bulkers have finally made a meaningful move towards better times by cutting investment. But the game isn’t over yet. They still need a strong world economy and continued Chinese import growth. Meanwhile a new chess game with destiny is getting started, this time in the shipyards as they try to plug the bulker gap. Maybe the game’s not over yet. So if you want a nice relaxing summer, our advice is don’t watch The Seventh Seal.
Source: Clarksons | Hellenic Shipping News
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Friday, 14 August 15
CONDITIONS AND COMPLEXITIES IN A TRIPARTITE AGREEMENT: BE SPECIFIC! - INCE & CO
KNOWLEDGE TO ELEVATE
A tripartite agreement reached between the Owners, the Shippers and the Receivers provided that demurrage be paid to the ...
Thursday, 13 August 15
THE RATES FOR CAPES KEPT RALLYING LAST WEEK - INTERMODAL
COALspot.com: Strong Capesize performance kept supporting the Dry Bulk market last week, which noted another positive weekly closing, while rates f ...
Thursday, 13 August 15
FOB RICHARDS BAY COAL SWAPS CONTINUE FALLING
COALspot.com: API4 FOB Richards Bay Coal swap for delivery 4Q' 2015 declined month over month and week over week.
The 4Q swap was down US$ ...
Wednesday, 12 August 15
DRY BULK MARKET: WITHOUT A DOUBT REACHED HEALTHIER LEVEL
A few weeks before the end of the summer season, the BDI is hovering around 1,200 points, providing some much needed optimism to all Dry Bulk marke ...
Wednesday, 12 August 15
REGULATION CURBS POWER OF LOCAL AUTHORITIES IN MINING SECTOR IN INDONESIA - FLORENCE G. SANTOSO
The Indonesian Government appears to be getting serious about stripping Regents of the authority to issue mining licenses. The Government took the ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercator Lines Limited - India
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Jaiprakash Power Ventures ltd
- Kepco SPC Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- European Bulk Services B.V. - Netherlands
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- GMR Energy Limited - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Ind-Barath Power Infra Limited - India
- Renaissance Capital - South Africa
- Simpson Spence & Young - Indonesia
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Madhucon Powers Ltd - India
- Pendopo Energi Batubara - Indonesia
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Asmin Koalindo Tuhup - Indonesia
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Trasteel International SA, Italy
- Essar Steel Hazira Ltd - India
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Ministry of Mines - Canada
- Tamil Nadu electricity Board
- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Timah Investasi Mineral - Indoneisa
- Sinarmas Energy and Mining - Indonesia
- Videocon Industries ltd - India
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- San Jose City I Power Corp, Philippines
- Xindia Steels Limited - India
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Bhoruka Overseas - Indonesia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Central Java Power - Indonesia
- SMC Global Power, Philippines
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Kideco Jaya Agung - Indonesia
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- PTC India Limited - India
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Formosa Plastics Group - Taiwan
- Vijayanagar Sugar Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Price Waterhouse Coopers - Russia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- TNB Fuel Sdn Bhd - Malaysia
- Energy Development Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- Minerals Council of Australia
- Mjunction Services Limited - India
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Banpu Public Company Limited - Thailand
- Cigading International Bulk Terminal - Indonesia
- Goldman Sachs - Singapore
- Agrawal Coal Company - India
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- CNBM International Corporation - China
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Tata Chemicals Ltd - India
- Bhatia International Limited - India
- Thiess Contractors Indonesia
- GVK Power & Infra Limited - India
- The University of Queensland
- Indonesian Coal Mining Association
- Rashtriya Ispat Nigam Limited - India
- Carbofer General Trading SA - India
- McConnell Dowell - Australia
- Romanian Commodities Exchange
- Parry Sugars Refinery, India
- Independent Power Producers Association of India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Borneo Indobara - Indonesia
- New Zealand Coal & Carbon
- Lanco Infratech Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Gujarat Sidhee Cement - India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Coastal Gujarat Power Limited - India
- Bhushan Steel Limited - India
- Coalindo Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Power Finance Corporation Ltd., India
- Energy Link Ltd, New Zealand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- South Luzon Thermal Energy Corporation
- Indika Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Singapore Mercantile Exchange
- Maharashtra Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Chamber of Mines of South Africa
- Parliament of New Zealand
- Jorong Barutama Greston.PT - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Kumho Petrochemical, South Korea
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Directorate Of Revenue Intelligence - India
- Kaltim Prima Coal - Indonesia
- Bharathi Cement Corporation - India
- Medco Energi Mining Internasional
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- Aditya Birla Group - India
- Billiton Holdings Pty Ltd - Australia
- Coal and Oil Company - UAE
- Indogreen Group - Indonesia
- Merrill Lynch Commodities Europe
- Wilmar Investment Holdings
- Ministry of Finance - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- OPG Power Generation Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Uttam Galva Steels Limited - India
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kobexindo Tractors - Indoneisa
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- Anglo American - United Kingdom
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
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