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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, 31 July 15
COAL PRODUCTION IN THE U.S. UP 3.6% FOR THE WEEK ENDING JULY 25
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.8 million shor ...
Friday, 31 July 15
CHINA'S NEW OIL IMPORT RULES HAVE MINIMAL IMPACT ON STATUS QUO - FITCH
Fitch Ratings says that China's looser criteria for crude oil import rights are a positive but modest step towards encouraging private-sector p ...
Thursday, 30 July 15
EFFECTS OF THE CHINESE STOCK MARKET CRISIS - INTERMODAL
All evidence is currently signaling that the Chinese stock market will be the newest hurdle for the global economy. With the world's second lar ...
Wednesday, 29 July 15
Q1'16 FOB INDONESIA COAL SWAP CLOSED HIGHER THAN Q3'15
COALspot.com: Indonesian coal swap for delivery Q3 2015 declined month on month and gains week over week, this past week.
The Q3 swap was decl ...
Wednesday, 29 July 15
Q4' 15 FOB RICHARDS BAY COAL SWAPS DECLINE 4.41% TO $56.52 PMT
COALspot.com: API4 FOB Richards Bay Coal swap for delivery Q3' 2015 declined month over month and week over week.
The Q3 swap was down US$ ...
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- Simpson Spence & Young - Indonesia
- Formosa Plastics Group - Taiwan
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- Singapore Mercantile Exchange
- Indian Oil Corporation Limited
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- Kohat Cement Company Ltd. - Pakistan
- Cigading International Bulk Terminal - Indonesia
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- TeaM Sual Corporation - Philippines
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- Eastern Coal Council - USA
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- Alfred C Toepfer International GmbH - Germany
- Ministry of Finance - Indonesia
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- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
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- Parliament of New Zealand
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- Wilmar Investment Holdings
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- Africa Commodities Group - South Africa
- Georgia Ports Authority, United States
- CNBM International Corporation - China
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- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- The University of Queensland
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- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
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- New Zealand Coal & Carbon
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- The Treasury - Australian Government
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- Price Waterhouse Coopers - Russia
- White Energy Company Limited
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- Mercator Lines Limited - India
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Semirara Mining Corp, Philippines
- Australian Coal Association
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- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Australian Commodity Traders Exchange
- SMC Global Power, Philippines
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Malabar Cements Ltd - India
- Meenaskhi Energy Private Limited - India
- Marubeni Corporation - India
- Orica Mining Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vijayanagar Sugar Pvt Ltd - India
- Economic Council, Georgia
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sree Jayajothi Cements Limited - India
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- London Commodity Brokers - England
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Transport, Egypt
- Planning Commission, India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Lanco Infratech Ltd - India
- ICICI Bank Limited - India
- Miang Besar Coal Terminal - Indonesia
- Ministry of Mines - Canada
- Neyveli Lignite Corporation Ltd, - India
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Intertek Mineral Services - Indonesia
- Coal and Oil Company - UAE
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Coalindo Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- Thai Mozambique Logistica
- Global Coal Blending Company Limited - Australia
- Riau Bara Harum - Indonesia
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Sindya Power Generating Company Private Ltd
- McConnell Dowell - Australia
- CIMB Investment Bank - Malaysia
- Siam City Cement - Thailand
- Directorate Of Revenue Intelligence - India
- Coastal Gujarat Power Limited - India
- Mjunction Services Limited - India
- Jindal Steel & Power Ltd - India
- Gujarat Electricity Regulatory Commission - India
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Bukit Baiduri Energy - Indonesia
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Binh Thuan Hamico - Vietnam
- Bharathi Cement Corporation - India
- Manunggal Multi Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Deloitte Consulting - India
- VISA Power Limited - India
- Central Electricity Authority - India
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Kepco SPC Power Corporation, Philippines
- Wood Mackenzie - Singapore
- San Jose City I Power Corp, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- South Luzon Thermal Energy Corporation
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Savvy Resources Ltd - HongKong
- Bank of Tokyo Mitsubishi UFJ Ltd
- IEA Clean Coal Centre - UK
- Bulk Trading Sa - Switzerland
- Thiess Contractors Indonesia
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Indogreen Group - Indonesia
- Kumho Petrochemical, South Korea
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
- Posco Energy - South Korea
- Madhucon Powers Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Goldman Sachs - Singapore
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Kaltim Prima Coal - Indonesia
- GMR Energy Limited - India
- International Coal Ventures Pvt Ltd - India
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- PTC India Limited - India
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- Mintek Dendrill Indonesia
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