Issuu on Google+

April 11-13, 2011 Cairo Marriott Hotel, Egypt

Dry Cargo Freight Market Fundamentals

Mr. Nicholas Collins Chief Operating Officer, Clarksons

Dubai


AFA Annual Fertilizers Forum & Exhibition Dry Cargo Freight Market Fundamentals Nick Collins Clarksons Dubai 13th April 2011

Fertilisers constitute 3% of drybulk seaborne trade Drybulk seaborne trade in 2010

Handysize < 40,000 dwt

St l Products Steel P d t 7.6% 7 6% Forest Products 5.2% Pig Iron 0.4% Coke 0.4%

Oth Others 1.8% 1 8% Capesize >100,000 dwt

Iron ore 29.5%

Cement 2.7% Scrap 3.1% Fertilisers 3.3% Agribulks 3.6% Sugar 1.6% Coking coal 8.0% Bauxite/Alumina 2.4%

Grains 10.4%

Steam coal 19.9%

Panamax 60-100,000 dwt

Handy/Supramax 40-60,000 dwt www.clarksons.com

1


Fleet fundamentals

www.clarksons.com

Total fleet and scheduled orderbook Fleet 140

On Order

40% of existing fleet on order (52% in dwt)

8,154 vessels in fleet

120

80 60 40 20 0 <= 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Million dwt

100

www.clarksons.com

2


Existing Fleet and Scheduled orderbook Existing Fleet vs Orderbook (Number) Existing Fleet

2 000 2,000

On Order

1,800 1,600

no of vessels

1,400 1,200

39%

1,000

60%

45% 45%

800 600

10%

7%

400

101%

200

222%

71%

0 Small Handysize (10-25k)

Large Handysize (25-40)

Handymax (40-50k)

Supramax (50-60k)

Panamax (60-85k)

Post Panamax (85-100k)

MiniCape (100-120k)

Capesize (120-220k)

VLOC (220-380k)

Chinamax (380k+)

www.clarksons.com

Existing Fleet and Scheduled orderbook Existing Fleet vs Orderbook (DWT) Existing Fleet

180

On Order

160 140

M illion Dwt

120 100

48%

80

42%

60

47%

62% 12% 72%

40

7%

103%

20

230%

0 Small Handysize (10-25k)

Large Handysize (25-40)

Handymax (40-50k)

Supramax (50-60k)

Panamax (60-85k)

Post Panamax (85-100k)

MiniCape (100-120k)

Capesize (120-220k)

VLOC (220380k)

Chinamax (380k+)

www.clarksons.com

3


Panamax (60-85k dwt) and Post Panamax (85-100k dwt) Fleet Profile Panamax fleet Panamax orderbook

35

942 vessels on order

Post panamax fleet Post p panamax orderbook

1,807 vessels in fleet

30

Million DWT

25 20 15 10 5

<= 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

0

www.clarksons.com

Handymax/Supramax fleet profile 26 24

50-60k dwt Fleet

40-50k dwt Orderbook

50-60k dwt Orderbook

825 vessels on order

2,162 vessels in fleet

16 14 12 10 8 6 4 2 0 <= 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Million dwt

22 20 18

40-50k dwt Fleet

www.clarksons.com

4


Handysize fleet profile 18

10-25k dwt Fleet

25-40k dwt Fleet

10-25k dwt Orderbook

25-40k dwt Orderbook

828 vessels on order

3,026 vessels in fleet

16 14 Million dwt

12 10 8 6 4 2 <= 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

www.clarksons.com

40% of drybulk deliveries are slipping

*

Scheduled deliveries

Actual deliveries

18 16 14

10 8 6 4 2

Nov -11

Sep-11

Jul-11

May -11

Mar-11

Jan-11

Nov -10

Sep-10

Jul-10

May -10

Mar-10

Jan-10

Nov -09

Sep-09

Jul-09

May -09

Mar-09

0 Jan-09

Million dw t

12

*Refer to 2010 www.clarksons.com

5


Demolition potential is based on special surveys Capesize

Panamax

Handy/Supram ax (6th,7th,8th)

(6th,7th,8th,9th)

(5th,6th)

(6th,7th,8th)

Handysize

2011

40

40

14

148

2012

39

71

41

227

2013

18

51

35

254

2014

22

56

69

268

119

218

159

897

TOTAL

● SScrapping i is i a function f ti off freight f i ht rates, t ffreight i ht and d special i l survey costs t and d scrap prices. i ● Special surveys are conducted every 5 years when the scrap decision becomes apparent. ● New build orders: ● ● ● ●

Capesize 663 Panamax 942 Handy/Supramax 825 Handysize 828

www.clarksons.com

Drybulk seaborne demand

www.clarksons.com

6


Iron ore trade is expected to continue with its robust growth World seaborne iron ore exports

And will reach over 1bn tonnes in 2011

1300 Other Sweden South Africa India Brazil Australia

1200 1100 1000 800 700 600 500 400 300 200 100 0 2005

2006

5007

2008

2009

2010 (f) 2011(f) 2012(f) 2013(f)

www.clarksons.com

Chinaâ&#x20AC;&#x2122;s coal demand surge continues Import

Export

Net Trade

100

50

0 Million tonnes

Million tonnes

900

-50

-100

-150

-200 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

www.clarksons.com

7


China’s coastal coal trade is growing •Domestic coal production is more than 3.1bn and forecast to exceed 4.1bn by 2015. •Coastal coal trade is more than 450mt and will increase. Heilongjiang

Xinjiang

Liaoning

Beijing Inner Mongolia

400 Million tonnes

Jilin

500

300

200

QINHUANGDAO

Qinghai

100

Tianjin

Hebei Shanxi

Shandong

0 Shaanxi

Tibet

Henan

Yangtze River

Hubei

Sichuan

Im ports

Jiangsu

Guizhou

436 mt 34%

Jiangxi

Gangsu

Yunnan Guangxi

Coastal coal trade

SHANGHAI

Anhui

Zhejiang Hunan

Exports

Fujian

831 mt 66%

Guangdong

Main coal net exporting provinces International coal seaborne trade

Main coal net importing provinces Hainan

Chinese coastal coal trade

www.clarksons.com

Changing trade routes and Fleet inefficiencies

www.clarksons.com

8


South African coal moving East and ships have to ballast South Africa’s coal exports 80 70

Other

Million tonnes

60

Other Asia

50

China

40

India

30

Europe

20 10 0 2005

2006

5007

2008

2009

2010*

•India is South Africa’s largest exporting country with 41% of total export volumes in 2010*. •Exports to China has increased to 11% of total in 2010*. *Jan-Oct annualised

www.clarksons.com

Economic growth will be driven by emerging economies Average Real GDP Growth during 2010-11

Growth in large emerging economies like India and Brazil are largely domestically driven Above 5 Between 3-5 Between 1-3 Below 1 No data Source: IMF, WEO Oct 2010 www.clarksons.com

9


â&#x20AC;Ścausing more trade to shift to the East % Split of cargoes open in the Atlantic and Pacific in 2003 vs 2009 Pacific

Atlantic

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2003

2009

2003

Handysize

2009

2003

2009

2003

2009

Capesize

Panamax

Handy/Supramax

www.clarksons.com

Port congestion adds to inefficiencies 400 350

Flooding in Australia adds to the queue

250 200 150 100 50

Auz iron ore India coal and iron ore Saldanha Bay Congestion

Braz iron ore China iron ore discharge

Dec-10

Oct-10

Nov-10

Sep-10

Jul-10

Aug-10

Jun-10

Apr-10

Mar-10

May-10

Jan-10

Feb-10

Dec-09

Oct-09

Nov-09

Sep-09

Jul-09

Jun-09

Aug-09

Apr-09

May-09

Mar-09

Jan-09

Feb-09

Dec-08

Oct-08

Nov-08

Jul-08

Sep-08

Aug-08

Jun-08

Apr-08

May-08

Mar-08

Jan-08

0 Feb-08

Vessels on anchorage

300

Auz coal Richards Bay Congestion

www.clarksons.com

10


Demand and Supply balance

www.clarksons.com

Conclusion ● Fertilisers are predominately shipped in Handy to Supramax vessels. ● General trade is forecast to grow at an average of 5.5% 5 5% per annum over the next 4 years with ton/mile growth higher.

● BUT huge fleet growth will put severe downward pressure on freight rates ● Inefficiencies in fleet utilisation (caused by port congestion and increased ● ● ●

ballasting) will assist keeping freight rates from collapse and therefore freight volatility will continue The medium term demand-supply balance tips heavily towards the supply The larger ships to be the main sufferers. Handy size to be far more resilient because less ess o overbuilt e bu t a and da an o older de fleet eet which c ca can be retired et ed more o e eas easily y In addition fertiliser charterers operating in Red Sea/AG/WC India will incur war risk insurance and very resilient freight rates due to piracy and changing patterns of trade thus may not fully benefit from the general weaker freight market

Thank You! www.clarksons.com

11


/120108151327_12_clarksons