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Friday, 14 September 18
10 YEARS ON FROM LEHMAN, HOW IS SHIPPING'S "HANGOVER"? - CLARKSONS RESEARCH
 On 15th September 2008, the collapse of Lehman Brothers crystallised the financial crisis and the onset the worst economic downturn for a century. To a shipping industry used to extreme cycles but transitioning to recession with rapid trade collapse and a huge newbuilding orderbook the initial shock was severe and the “hangover” prolonged. This week’s Analysis compares the situation almost ten years to the day.
Bye Bye Boom… Even for an industry well used to severe cycles (and with warning signals if you looked hard enough), after five years of freight rates sustained at levels not seen for a century, the transition to recession after Lehman was dramatic. The most catastrophic collapse was in Capesize. From surging to a frenzied $300,000/day in June 2008 (fanned by a $180/t iron ore price, stockpiling and congestion) earnings collapsed to $6,000/day in October and $2,000/day in November. Initially the tanker market was more stable, helped by single hull conversion and trader storage, while the container market saw 12% of the fleet laid up by late-2009.
Not The 80s Revisited? As our graph shows, unsurprisingly rates and prices today sit well below the week preceding Lehman. But although the shipping recession has felt prolonged, it’s been far from a “dead” decade with surprising upside at times. Even in 2009, Capesize earnings rose to $70,000/day as China’s steel output yo-yoed. There were also spikes in LNG (2012), LPG (2014-5), tankers (2015) and offshore (2013-14); and heavy (over!) newbuild ordering (2010, 2013) and record years for S&P (2017), so plenty of business has been done, helped by low interest rates. Arguably the container sector has had the most pain (but it’s a close call, and spare a thought for the bankers?).
Shipyard Surge…
Although shipyard output has dropped by 16% over the ten years (to 80m dwt), that’s far from the whole story! Having built up a record backlog (c.650m dwt, a daunting 55% of the fleet) and at prices that “on paper” were very profitable, the unravelling of the financial and contractual complexities became an appallingly complex task (especially with 30% of the capacity involved “greenfield”, and financial structures such as the KG). With analysts tracking cancellation and slippage closely, shipyard production eventually peaked in 2011 (the fastest output growth in peace time). At times fleet growth has felt relentless (peaking at 9% in 2011, a more helpful 2.6% in 2018) as shipbuilding has worked through its overcapacity. Although demolition has doubled in the ten years since, the world fleet is still a staggering 67% larger today (1.96m dwt!) than at the onset of the financial crisis.
Trading Up?
The immediate sea trade deterioration was severe, with volumes declining for only the second time in 30 years in 2009 (by 4%, with oil down 3%, dry bulk down 3% and containers down 9%). Trends since have been more encouraging, with a 38% increase (exactly the same % as GDP growth) to 12.0bn tonnes (big winners include dry bulk (+1.7bt), supported by a series of Chinese fiscal stimulus and infrastructure investments). After a “tough” ten years, that’s a more positive note to end on! Have a better decade!
Source: Clarksons Research
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Wednesday, 24 October 18
MARKET INSIGHT - NASSOS SOULAKIS
Looking at 2018 SnP activity, it is evident that Greek, Chinese and North European (German and Norwegian) owners are the top buying nationalities, ...
Wednesday, 24 October 18
CHINESE POWER PLANT STOCKPILES AT HIGHEST LEVEL SINCE 2015 - JEFFREY LANDSBERG
Chinese power plant coal stockpiles have climbed to approximately 83.3 million tons as of the middle of this month, said Jeffrey Landsberg in his e ...
Tuesday, 23 October 18
WILL THE U.S. COAL DECLINE CONTINUE? - FORBES
What’s Trump’s new coal proposal?
Adding to its controversial plan to leverage federal authority to keep retiring baselo ...
Monday, 22 October 18
CONTINUED HIGH LNG PRICES; TRADE WAR IMPACT LIMITED - FITCH RATINGS
Fitch Ratings expects sustained high spot liquefied natural gas (LNG) and contract prices over the next two quarters on limited investment in LNG e ...
Monday, 22 October 18
WINTER OIL MARKET OUTLOOK - OPEC
The oil market in the winter season is generally characterized by demand for diesel, particularly in the northern hemisphere, leaving product marke ...
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- Maharashtra Electricity Regulatory Commission - India
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Grasim Industreis Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Meenaskhi Energy Private Limited - India
- Price Waterhouse Coopers - Russia
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Carbofer General Trading SA - India
- Miang Besar Coal Terminal - Indonesia
- Chettinad Cement Corporation Ltd - India
- Tata Chemicals Ltd - India
- Chamber of Mines of South Africa
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Therma Luzon, Inc, Philippines
- Iligan Light & Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- Vijayanagar Sugar Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Timah Investasi Mineral - Indoneisa
- SN Aboitiz Power Inc, Philippines
- Karaikal Port Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Independent Power Producers Association of India
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- AsiaOL BioFuels Corp., Philippines
- Krishnapatnam Port Company Ltd. - India
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- Indika Energy - Indonesia
- The University of Queensland
- Interocean Group of Companies - India
- GN Power Mariveles Coal Plant, Philippines
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Straits Asia Resources Limited - Singapore
- Indo Tambangraya Megah - Indonesia
- GAC Shipping (India) Pvt Ltd
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Vizag Seaport Private Limited - India
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- Eastern Coal Council - USA
- San Jose City I Power Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Coastal Gujarat Power Limited - India
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Bhushan Steel Limited - India
- Kumho Petrochemical, South Korea
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Kobexindo Tractors - Indoneisa
- Rio Tinto Coal - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- London Commodity Brokers - England
- Bank of Tokyo Mitsubishi UFJ Ltd
- Neyveli Lignite Corporation Ltd, - India
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Planning Commission, India
- Kalimantan Lumbung Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- Semirara Mining and Power Corporation, Philippines
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Standard Chartered Bank - UAE
- Banpu Public Company Limited - Thailand
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Savvy Resources Ltd - HongKong
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Parliament of New Zealand
- Central Electricity Authority - India
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Metalloyd Limited - United Kingdom
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Sindya Power Generating Company Private Ltd
- The State Trading Corporation of India Ltd
- CNBM International Corporation - China
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Renaissance Capital - South Africa
- Energy Development Corp, Philippines
- PowerSource Philippines DevCo
- Formosa Plastics Group - Taiwan
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Madhucon Powers Ltd - India
- Malabar Cements Ltd - India
- Videocon Industries ltd - India
- Economic Council, Georgia
- Central Java Power - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Sojitz Corporation - Japan
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
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