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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 $6,212/day in the first half. For the first time signs of real distress are apparent. After 8 years, dry bulk sentiment finally collapsed and bulker orders fell from 16m dwt in January 2014 to 0.05m dwt in June 2015. A helpful step towards market recovery, but it leaves the shipyards with a problem. Over the last 8 years bulkers were a third of shipyard workload (see inset pie chart). Although tankers and container ships are still being ordered, they show no sign of filling the gap left by bulkers.
Dance Macabre
So there you have it. Bulkers have finally made a meaningful move towards better times by cutting investment. But the game isn’t over yet. They still need a strong world economy and continued Chinese import growth. Meanwhile a new chess game with destiny is getting started, this time in the shipyards as they try to plug the bulker gap. Maybe the game’s not over yet. So if you want a nice relaxing summer, our advice is don’t watch The Seventh Seal.
Source: Clarksons | Hellenic Shipping News
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Monday, 15 June 15
CFR SOUTH CHINA COAL SWAP: ROSE M-O-M; DECLINED W-O-W
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery rose US$ 1.43 (2.82%) per MT month over month.
A commodity swap is a ...
Sunday, 14 June 15
THE FREIGHT MARKET FINISHED THE WEEK UP COMPARED TO LAST WEEK
COALspot.com: The freight market finished the week up compared to last week. All the segments except for Cape index were up. Cape segment was ...
Friday, 12 June 15
EXPECTATIONS IN REGARDS TO THE SUMMER SEASON VARY ACROSS THE MARKET - INTERMODAL
The Dry Bulk market closed off last slightly up last week, with the BDI re-gaining the 600 points level, while the driving force behind the increas ...
Friday, 12 June 15
U.S. PRODUCED 15.1 MMST OF COAL THIS PAST WEEK - EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 15.1 million short ...
Thursday, 11 June 15
IS COAL INDUSTRY GOING TO HIT A BRICK WALL?
COALspot.com - The Director General of Mineral and Coal of Indonesia revised down Indonesian coal benchmark price once again to US$ 59.59 per MT fo ...
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- Ambuja Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Gujarat Mineral Development Corp Ltd - India
- Bukit Baiduri Energy - Indonesia
- Ministry of Finance - Indonesia
- Indogreen Group - Indonesia
- Coalindo Energy - Indonesia
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Wood Mackenzie - Singapore
- Thai Mozambique Logistica
- Siam City Cement PLC, Thailand
- Siam City Cement - Thailand
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Power Finance Corporation Ltd., India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Pendopo Energi Batubara - Indonesia
- Binh Thuan Hamico - Vietnam
- Gujarat Electricity Regulatory Commission - India
- CNBM International Corporation - China
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Makarim & Taira - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Simpson Spence & Young - Indonesia
- Edison Trading Spa - Italy
- Romanian Commodities Exchange
- Therma Luzon, Inc, Philippines
- CIMB Investment Bank - Malaysia
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- Jaiprakash Power Ventures ltd
- Miang Besar Coal Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- PTC India Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Bangladesh Power Developement Board
- Meralco Power Generation, Philippines
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- Bharathi Cement Corporation - India
- Straits Asia Resources Limited - Singapore
- Xindia Steels Limited - India
- Oldendorff Carriers - Singapore
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Central Java Power - Indonesia
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Sarangani Energy Corporation, Philippines
- Singapore Mercantile Exchange
- International Coal Ventures Pvt Ltd - India
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Central Electricity Authority - India
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Parry Sugars Refinery, India
- Rashtriya Ispat Nigam Limited - India
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Mercator Lines Limited - India
- Energy Link Ltd, New Zealand
- Georgia Ports Authority, United States
- MS Steel International - UAE
- Indonesian Coal Mining Association
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Manunggal Multi Energi - Indonesia
- Posco Energy - South Korea
- Uttam Galva Steels Limited - India
- ICICI Bank Limited - India
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Sical Logistics Limited - India
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- San Jose City I Power Corp, Philippines
- Aditya Birla Group - India
- The State Trading Corporation of India Ltd
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Kobexindo Tractors - Indoneisa
- SMG Consultants - Indonesia
- Global Business Power Corporation, Philippines
- Petron Corporation, Philippines
- White Energy Company Limited
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- VISA Power Limited - India
- Anglo American - United Kingdom
- Bayan Resources Tbk. - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- Directorate Of Revenue Intelligence - India
- LBH Netherlands Bv - Netherlands
- Sree Jayajothi Cements Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Deloitte Consulting - India
- Minerals Council of Australia
- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- New Zealand Coal & Carbon
- Africa Commodities Group - South Africa
- SMC Global Power, Philippines
- London Commodity Brokers - England
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Marubeni Corporation - India
- Chamber of Mines of South Africa
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Ceylon Electricity Board - Sri Lanka
- PowerSource Philippines DevCo
- Gujarat Sidhee Cement - India
- GN Power Mariveles Coal Plant, Philippines
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Planning Commission, India
- Karaikal Port Pvt Ltd - India
- Latin American Coal - Colombia
- GVK Power & Infra Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Vijayanagar Sugar Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Riau Bara Harum - Indonesia
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Sakthi Sugars Limited - India
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- Renaissance Capital - South Africa
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- South Luzon Thermal Energy Corporation
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Savvy Resources Ltd - HongKong
- Semirara Mining and Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Antam Resourcindo - Indonesia
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