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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, 29 May 15
SOUTH KOREAN STATE-OWNED UTILITY KOREA MIDLAND POWER INVITES BIDS FOR 780K MT OF COAL FOR H2' 15
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to buy total 780K Metric Tons (MT) of HCV and LCV ...
Thursday, 28 May 15
TIMEBAR FOR DEMURRAGE CLAIMS - SKULD
KNOWLEDGE TO ELEVATE
English law has traditionally had a strict approach to contractually agreed time bars between commercial parties as well ...
Wednesday, 27 May 15
MARKET INSIGHT - TIMOS PAPADIMITRIOU
Earlier in the year I looked at how the market was reacting to the prolonged fall of the price of oil. Back then it was still unclear if the fallin ...
Tuesday, 26 May 15
HOW HAS THE DROP IN OIL PRICES AFFECTED OTHER COMMODITIES? - CLYDE & CO
KNOWLEDGE TO ELEVATE
The effects of the dramatic drop in the price of both Ice March Brent, the international oil marker, and its US counterpa ...
Tuesday, 26 May 15
MINING ASSOCIATION PERHAPI PUSHES FOR 35,000 MEGAWATT ELECTRICITY PROGRAM - JG
The Indonesian Mining Professionals Association, or Perhapi, has announced its support for a 35,000-megawatt national electricity program, saying i ...
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- Bayan Resources Tbk. - Indonesia
- Intertek Mineral Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Siam City Cement PLC, Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Aboitiz Power Corporation - Philippines
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Indian Oil Corporation Limited
- Parry Sugars Refinery, India
- Grasim Industreis Ltd - India
- Manunggal Multi Energi - Indonesia
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Kalimantan Lumbung Energi - Indonesia
- IEA Clean Coal Centre - UK
- Star Paper Mills Limited - India
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Sree Jayajothi Cements Limited - India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Cement Manufacturers Association - India
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Kumho Petrochemical, South Korea
- Independent Power Producers Association of India
- Toyota Tsusho Corporation, Japan
- Jindal Steel & Power Ltd - India
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- PetroVietnam Power Coal Import and Supply Company
- ICICI Bank Limited - India
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Heidelberg Cement - Germany
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Karaikal Port Pvt Ltd - India
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Ambuja Cements Ltd - India
- Vedanta Resources Plc - India
- Rio Tinto Coal - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Africa Commodities Group - South Africa
- Billiton Holdings Pty Ltd - Australia
- Price Waterhouse Coopers - Russia
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Interocean Group of Companies - India
- Electricity Authority, New Zealand
- Georgia Ports Authority, United States
- Posco Energy - South Korea
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- The Treasury - Australian Government
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Coalindo Energy - Indonesia
- South Luzon Thermal Energy Corporation
- Parliament of New Zealand
- Dalmia Cement Bharat India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Indogreen Group - Indonesia
- Aditya Birla Group - India
- Eastern Coal Council - USA
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Directorate Of Revenue Intelligence - India
- Economic Council, Georgia
- International Coal Ventures Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Makarim & Taira - Indonesia
- PNOC Exploration Corporation - Philippines
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Lanco Infratech Ltd - India
- Power Finance Corporation Ltd., India
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- SMC Global Power, Philippines
- Electricity Generating Authority of Thailand
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Orica Mining Services - Indonesia
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- MS Steel International - UAE
- Sinarmas Energy and Mining - Indonesia
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Barasentosa Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Baramulti Group, Indonesia
- Bhushan Steel Limited - India
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Mintek Dendrill Indonesia
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- SMG Consultants - Indonesia
- Kaltim Prima Coal - Indonesia
- Tata Chemicals Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Petron Corporation, Philippines
- Indonesian Coal Mining Association
- Agrawal Coal Company - India
- GAC Shipping (India) Pvt Ltd
- Gujarat Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- Australian Coal Association
- Bukit Baiduri Energy - Indonesia
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Ministry of Finance - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Essar Steel Hazira Ltd - India
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Anglo American - United Kingdom
- Jorong Barutama Greston.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Altura Mining Limited, Indonesia
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Attock Cement Pakistan Limited
- Kohat Cement Company Ltd. - Pakistan
- Kapuas Tunggal Persada - Indonesia
- Leighton Contractors Pty Ltd - Australia
- IHS Mccloskey Coal Group - USA
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