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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 $6,212/day in the first half. For the first time signs of real distress are apparent. After 8 years, dry bulk sentiment finally collapsed and bulker orders fell from 16m dwt in January 2014 to 0.05m dwt in June 2015. A helpful step towards market recovery, but it leaves the shipyards with a problem. Over the last 8 years bulkers were a third of shipyard workload (see inset pie chart). Although tankers and container ships are still being ordered, they show no sign of filling the gap left by bulkers.
Dance Macabre
So there you have it. Bulkers have finally made a meaningful move towards better times by cutting investment. But the game isn’t over yet. They still need a strong world economy and continued Chinese import growth. Meanwhile a new chess game with destiny is getting started, this time in the shipyards as they try to plug the bulker gap. Maybe the game’s not over yet. So if you want a nice relaxing summer, our advice is don’t watch The Seventh Seal.
Source: Clarksons | Hellenic Shipping News
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Monday, 11 May 15
CFR SOUTH CHINA COAL SWAP: DECLINED MOM AND WOW
COALspot.com: API 8 CFR South China Coal swap for Q3’ 2015 delivery declined US$ 0.46 (-0.90%) per MT month over month and US$ 0.28 (0. ...
Monday, 11 May 15
KOREA MIDLAND POWER INVITES BIDS FOR 140K MT OF 4600 NAR COAL
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued a new tender to buy total 140,000 Metric Tons (MT) of Sub-bitumi ...
Sunday, 10 May 15
FREIGHT RATES TO REMAIN SOFT NEXT WEEK
COALspot.com: The freight market was flat to soft week over week except for the Cape Index which was up 7.32%. Cape index was closed at 616 p ...
Friday, 08 May 15
BUSIEST CAPESIZE DEMOLITION MARKET EVER - BIMCO
The activity on the demolition market is off to a good start in 2015 when looking at dry bulk tonnage.
The dry bulk market has long suffered f ...
Friday, 08 May 15
COAL PRODUCTION IN U.S. UP 3.2% THIS PAST WEEK - EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 17.4 million short ...
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- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Africa Commodities Group - South Africa
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Australian Coal Association
- Manunggal Multi Energi - Indonesia
- Grasim Industreis Ltd - India
- India Bulls Power Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indian Energy Exchange, India
- Sical Logistics Limited - India
- South Luzon Thermal Energy Corporation
- Siam City Cement PLC, Thailand
- Semirara Mining and Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Central Java Power - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Vedanta Resources Plc - India
- Aboitiz Power Corporation - Philippines
- Salva Resources Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- GVK Power & Infra Limited - India
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Oldendorff Carriers - Singapore
- Cement Manufacturers Association - India
- Aditya Birla Group - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Central Electricity Authority - India
- London Commodity Brokers - England
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Energy Development Corp, Philippines
- White Energy Company Limited
- Ministry of Transport, Egypt
- Latin American Coal - Colombia
- Baramulti Group, Indonesia
- Bhoruka Overseas - Indonesia
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Larsen & Toubro Limited - India
- Planning Commission, India
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Sakthi Sugars Limited - India
- Sarangani Energy Corporation, Philippines
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Global Business Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Kideco Jaya Agung - Indonesia
- Marubeni Corporation - India
- Wood Mackenzie - Singapore
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Australian Commodity Traders Exchange
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Orica Mining Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement - Thailand
- Indo Tambangraya Megah - Indonesia
- OPG Power Generation Pvt Ltd - India
- Dalmia Cement Bharat India
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- PTC India Limited - India
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Ministry of Mines - Canada
- Petrochimia International Co. Ltd.- Taiwan
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Karaikal Port Pvt Ltd - India
- Lanco Infratech Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- McConnell Dowell - Australia
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Krishnapatnam Port Company Ltd. - India
- Indonesian Coal Mining Association
- Maharashtra Electricity Regulatory Commission - India
- Independent Power Producers Association of India
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- GMR Energy Limited - India
- Bayan Resources Tbk. - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- ASAPP Information Group - India
- LBH Netherlands Bv - Netherlands
- Edison Trading Spa - Italy
- Meralco Power Generation, Philippines
- IEA Clean Coal Centre - UK
- VISA Power Limited - India
- Simpson Spence & Young - Indonesia
- Sree Jayajothi Cements Limited - India
- Alfred C Toepfer International GmbH - Germany
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Mercator Lines Limited - India
- Indika Energy - Indonesia
- Coal and Oil Company - UAE
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Sojitz Corporation - Japan
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- The State Trading Corporation of India Ltd
- Semirara Mining Corp, Philippines
- Anglo American - United Kingdom
- Bukit Makmur.PT - Indonesia
- Kapuas Tunggal Persada - Indonesia
- The University of Queensland
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- Tamil Nadu electricity Board
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Intertek Mineral Services - Indonesia
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Billiton Holdings Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Electricity Authority, New Zealand
- Minerals Council of Australia
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- Economic Council, Georgia
- Deloitte Consulting - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- Uttam Galva Steels Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Jindal Steel & Power Ltd - India
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