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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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Sunday, 19 April 15
THE OCEAN FREIGHT MARKET SHOWED STEADY THIS WEEK
COALspot.com: The freight market was fairly steady this week. The BDI was up 2.93% to 597 points week over week. The cape index was also increased ...
Friday, 17 April 15
IHS ENERGY EUROPEAN COAL OUTLOOK CONFERENCE
Attend the IHS Energy European Coal Outlook Conference 19-20 May in Nice, France and learn about timely concerns in today’s coal industry.
...
Friday, 17 April 15
COAL PRODUCTION IN THE U.S. UP THIS PAST WEEK - EIA
COALspot.com – United States the second largest coal producer in the world has produced approximately totaled an estimated 18.0 million short ...
Thursday, 16 April 15
NEW COMMODITY SUPERHIGHWAY WILL EMERGE IN CHINA, ALTERING ENERGY TRADE FLOWS - WOOD MACKENZIE
Wood Mackenzie says that China’s Go West strategy – encouraging coastal to inland flow of capital and people - will result in the forma ...
Thursday, 16 April 15
SHIPPING DEMAND TO SUFFER AS CHINESE SLOWDOWN CONFIRMED SAYS BIMCO'S CHIEF SHIPPING ANALYST - BIMCO
The Chinese economy grew by 7.0% y-o-y in the first quarter of 2015, according to National Bureau of Statistics in China. This is the weakest overa ...
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- Ministry of Mines - Canada
- Cigading International Bulk Terminal - Indonesia
- PowerSource Philippines DevCo
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Xindia Steels Limited - India
- Edison Trading Spa - Italy
- CNBM International Corporation - China
- International Coal Ventures Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Agrawal Coal Company - India
- Indian Energy Exchange, India
- Malabar Cements Ltd - India
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Meralco Power Generation, Philippines
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Karbindo Abesyapradhi - Indoneisa
- Savvy Resources Ltd - HongKong
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Larsen & Toubro Limited - India
- Sakthi Sugars Limited - India
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Posco Energy - South Korea
- Metalloyd Limited - United Kingdom
- Merrill Lynch Commodities Europe
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- IEA Clean Coal Centre - UK
- Bukit Makmur.PT - Indonesia
- Dalmia Cement Bharat India
- Mjunction Services Limited - India
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Coal and Oil Company - UAE
- Bhatia International Limited - India
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Uttam Galva Steels Limited - India
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Georgia Ports Authority, United States
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- The University of Queensland
- Wilmar Investment Holdings
- VISA Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Thiess Contractors Indonesia
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Indika Energy - Indonesia
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Cement Manufacturers Association - India
- Toyota Tsusho Corporation, Japan
- Australian Coal Association
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Vizag Seaport Private Limited - India
- Heidelberg Cement - Germany
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Directorate Of Revenue Intelligence - India
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Trasteel International SA, Italy
- Independent Power Producers Association of India
- Intertek Mineral Services - Indonesia
- Energy Development Corp, Philippines
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Tata Chemicals Ltd - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Deloitte Consulting - India
- Economic Council, Georgia
- Coalindo Energy - Indonesia
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- Power Finance Corporation Ltd., India
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Carbofer General Trading SA - India
- Port Waratah Coal Services - Australia
- MS Steel International - UAE
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Bhushan Steel Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Price Waterhouse Coopers - Russia
- Riau Bara Harum - Indonesia
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- GMR Energy Limited - India
- Minerals Council of Australia
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Thai Mozambique Logistica
- Parliament of New Zealand
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sical Logistics Limited - India
- Marubeni Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- South Luzon Thermal Energy Corporation
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
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