Dry Bulk Trade Outlook Volume 11, No 11 ISSN: 1361-3189 CABI* as at November, 2005 Atlantic Freight Costs Last Month...... HIGHER!! Grain: Selection of major dry bulk loading ports Pacific Freight Costs Last Month...... HIGHER!! Grain: November, 2005 Coal: HIGHER!! Shipping Intelligence Network.... "represents a giant leap forward in the information technology development in shipping." Join the SIN Club "With shipping's first 'need to know' information portal, Clarkson has made shipping intelligence better than ever before." www.clarksons.net HIGHER!! Ore: Ore: HIGHER!! FIRMER Coal: 500 1000 1500 2000 2500 3000 3500 4000 4500 1990 1992 1994 1996 1998 2000 2002 2004 *Clarkson Average Bulker-Earnings Index Highlights Review Review of Baltic Indices. market overview and vessel requirements.....................p.2/3. Iron Ore Australian iron ore exports show impressive growth...p.4/5. Coking Coal Strong growth for Australian coking coal exports in the first three quarters of 2005 ......p.6/7. Steam Coal More strong growth for Indian steam coal imports ...........p.8/9. Wheat & Grain North African wheat imports predicted to rebound ....p.10/12. Minor Bulks Japan likely to break its record for scrap exports................ p.13. The Dry Bulk Fleet Nine pages of fleet and freight rate data, plus prices and earnings; fleet forecasts for end 2005 ...................... p.14-23. Commodity Countdown: The Soybean Trade A ntwerp Lul ea Bahi a Bl anca R. Pl at e Par anagua Sepet i ba Tubarao P. da Madeira P . Bol ivar Nouadhi bou Sa l danhaBay Ri char ds Bay El Aai un Nar vi k Nor t h Por t Tees Phi la del phi a Bal ti mo re Nor f ol k N. Orl eans Por t Car t i er P. Or daz Ant wer p QH D LosA n gel es Por t l and P. R upe rt S anNi c ol as Huasco Guayacan Lyt l et on P .Kembl a Newcast le Gl adst one Ha y Poi nt Abbot Poi nt Por t Hedl and Dam pi er M or m ugao T anj ungBar a Bunbur y P . Adel ai de Long Beach Weipa Vi zag Madr as Li anyungang Pu l auLaut Sewar d Vanc ouver Vost ochny QHD
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Dry Bulk TradeOutlook
Volume 11, No 11 ISSN: 1361-3189
CABI* as at November, 2005 Atlantic Freight Costs Last Month......
HIGHER!! Grain:
Selection of major dry bulk loading ports
Pacific Freight Costs Last Month......
HIGHER!! Grain:
November, 2005
Coal: HIGHER!!
Shipping Intelligence Network.... "represents a giant leap forward in the information technology development in
shipping."
Join the SIN Club "With shipping's first 'need to know' information portal, Clarkson has made shipping intelligence better than ever
before."www.clarksons.net
HIGHER!!Ore:
Ore: HIGHER!! FIRMERCoal:
500
1000
1500
2000
2500
3000
3500
4000
4500
1990 1992 1994 1996 1998 2000 2002 2004*Clarkson Average Bulker-Earnings Index
Highlights
Review Review of Baltic Indices. market overview and vessel requirements.....................p.2/3.Iron Ore Australian iron ore exports show impressive growth...p.4/5.Coking Coal Strong growth for Australian coking coal exports in the first three quarters of 2005 ......p.6/7.Steam Coal More strong growth for Indian steam coal imports ...........p.8/9.Wheat & Grain North African wheat imports predicted to rebound ....p.10/12.Minor Bulks Japan likely to break its record for scrap exports................p.13.The Dry Bulk Fleet Nine pages of fleet and freight rate data, plus prices and earnings; fleet forecasts for end 2005...................... p.14-23.Commodity Countdown: The Soybean Trade
A ntwer p
Lulea
Bahia BlancaR. Pl ate
ParanaguaSepet iba
Tubarao
P.da Madei ra
P. Boli varNouadhibou
S al danha Bay Richar ds Bay
El Aaiun
Nar vik
Nor th Por tTees
Phil adel phiaBalt im or e
Norf olk
N. Or leans
Por t Car tier
P.O rdaz
Antwer p
QH DLos A ngel es
Por tl and
P.R uper t
S an Ni col as
HuascoGuayacan
Lytt let on
P. Kembl aNewcastl eGladst one
H ay PointAbbot PointPort Hedl and
Dam pier
M orm ugao
Tanj ung Bar a
Bunbur y
P. Adelai de
Long Beach
Wei pa
Vi zag
Madr as
Lianyungang
P ul au Laut
Sewar d
Vancouver
VostochnyQHD
Dry Trade Trend
Bulks... Est. F'cast Next Year v.1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 This Year...
The Freight Indices October – November ‘05Capesize: After a continuous improvement from August, the BCI hit a recent peak of 5,125 on October 14. Since then, it has been falling slowly and on November 9 it was down to 4,338. Average spot earnings for a modern Capesize slipped to $47,118/day on November 4, compared with $53,031/day on October 14. Panamax: Average spot earnings for a modern Panamax vessel slipped to $16,938/day on November 4, from $19,962/day on October 14. A day earlier the BPI recorded a recent high of 2,874. Since then it has been moving in a lower range and on November 9 it was only 2,493. Handymax: After being above 19,000 for more than ten days in late October, the BHMI followed a similar downward trend. On November 9 it was reported as 18,041. One year time charter rates for 30,000dwt bulk carrier was $12,750/day on November 11, a $1,000 drop from a month ago.
News for the Bulk Market o The OECD’s composite leading indicator (CLI) showed further improvement in September, and with upward revisions to the previous month’s data, the six-month rate of change in the CLI has now increased for five consecutive months. This continuing upturn is an encouraging sign for industrial growth and dry bulk trade. Nevertheless, the performance of different regions varied, with the CLIs for European countries and for Japan continuing to strengthen, while that for the US deteriorated. Macquarie Research estimated that the actual industrial production growth (based on PPP weightings) points to OECD growth of 2.1% y-o-y in August, up slightly from 1.9% in July. o The Indian government has recently approved a new national steel policy which aims to increase production almost threefold in the next 15 years. “The aim of the policy is to make the industry globally competitive, not only in terms of cost, quality and product mix, but also in the areas of efficiency and productivity,” said an official statement. The policy sets a target of producing over 100mt of steel by the 2019/20 financial year, up from 38mt in 2004-05. This represents a compound annual growth rate of 7.3%. The increase is designed to narrow the gap in per capita steel consumption between India and the rest of the world, and thus improve the living condition of poorer Indians. The country currently consumes about 33kg/person per year, against the Asian average of 142kg, according to International Iron & Steel Institute figures.
^ Totals include minor exporters omitted from table. " Forecast; all figures for total Calendar Year. ~ Canadian total excludes exports to US.
Clarkson Research Studies Nov-05
Iron Ore Trade (2)
Steel Production & Capesize Freight Rates...
Million Tonnes
Page 5
306321
311 319
348362
347358
427
402
448 451
481
519
589
644
686
250
300
350
400
450
500
550
600
650
700
1984
1985
1986
1987
1988
1989
1990
1991
1998
1999
2000
2001
2002
2003
2004
2005
2006
*
mt
FORECAST:Trade set to increase by 7% in 2006.
o Australia's iron ore exports to China fell back to a more "normal" level of 9.7mt in September compared to the record high of 11mt recorded in August, according to China Customs statistics. Still, Australia's September supplies represented a 42% share of the China's import market. India exported 5.7mt of iron ore to China in September, taking a 25% market share and Brazil exported 5.3mt of iron ore for a 23% market share. The final published figure showed that, in the first nine months of 2005 China's iron ore imports totalled 198.93mt. Australia exported 82.1mt, followed by India (52.5mt), Brazil (38.8mt), South Africa (7.6mt) and Russia (2.5mt).
o According to the Australian Bureau of Statistics, Australian iron ore exports have risen by a massive 15.2% y-o-y in the first nine months this year, reaching an annualised rate of 237mt.
o Major Chinese steelmakers are calling for the authorities to impose a cap on iron ore imports for 2006. The call follows a meeting of China's top ten steelmakers organised by the National Development & Reform Commission (NDRC) at Baosteel's headquarter in Shanghai. After discussion, steelmakers proposed that iron ore imports not be increased in 2006, and that better order be applied to China's spot iron ore market. This differs with CISA’s forecast that China will need to import at least 40-45mt more iron ore in 2006, compared with around 270mt this year. The aim of the proposed cap is to squeeze out small and "unruly" steel mills from the market. Only after that will proper market order emerge, they believe.
o Rio Tinto is to spend $1.35bn to expand iron ore mining and ship loading capacity in Western Australia. It will raise the capacity of the company’s ports in the Pilbara close to 200mtpy. Some $530m will be spent to increase capacity at the Yandicoogina mine of its wholly owned Hamersley Iron subsidiary from 36mtpy to 52mtpy, making it the largest iron ore mine in Australia. Construction will begin in December and should be completed at the end of 2007, with progressive ramp-up during 2008. Rio Tinto will invest another $690m to expand port facilities at Dampier which will raise capacity to 140mtpy by the end of 2007 from 116mtpy currently. Additional rolling stock and infrastructure to support these increased levels of production will absorb a further $113m.
-15%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Jan
93Ju
l 93
Jan
94Ju
l 94
Jan
95Ju
l 95
Jan
96Ju
l 96
Jan
97Ju
l 97
Jan
98Ju
l 98
Jan
99Ju
l 99
Jan
00Ju
l 00
Jan
01Ju
l 01
Jan
02Ju
l 02
Jan
03Ju
l 03
Jan
04Ju
l 04
Jan
05Ju
l 05
-150%
-100%
-50%
0%
50%
100%
150%
200%
250%
300%
350%
400%
Steel Production Index y-o-y % change Cape Earnings y-o-y % change
Trade Weighted Steel Production
Index
Imports to Import Trend Europe... Est. F'cast Next Year v.
Total Export Trend Exports... Est. F'cast Next Year v.
1998 1999 2000 2001 2002 2003 2004 2005 2006 This Year...Australia 83.6 92.4 99.6 106.1 104.4 111.1 116.3 126.0 135.0 FIRM 7%Canada (ex US) 27.9 28.5 27.8 27.3 21.4 22.6 24.5 27.0 32.0 FIRM 19%US (ex Canada) 38.3 25.3 26.3 19.5 15.3 17.1 20.9 21.6 20.0 SOFTER -7%China 4.9 5.2 6.5 11.5 13.3 13.1 5.7 3.4 3.6 FIRM 6%OTHERS 14.5 10.3 13.7 4.6 18.4 14.7 18.3 13.9 9.4 WEAKER!! -32%TOTAL 169 162 174 169 173 179 186 192 200 FIRM 4%Coking coal - hard coal with a quality that allows production of coke suitable to support a blast furnace charge (excludes PCI coal).
Totals include minor importers omitted from the table. *Forecast; all figures for total Calendar Year.
Clarkson Research Studies Page 6 Nov-05
Million Tonnes
Seaborne Coking Coal Trade
Million Tonnes
Million Tonnes
Million Tonnes
Million Tonnes
Commentary
Coking Coal News
To Japan...*1999 2000 2001 2002 2003
Australia MV 41.90 39.75 42.75 48.10 46.20
China HV 35.53 33.67 36.31 34.20 36.31
Canada MV 40.38 38.36 41.38 46.50 44.65
Canada LV 41.50 39.06 41.94 47.25 47.35
* Export Contract Base Price-Historic prices from IEA
Contract Base Price for Aust. MV = Goonyella; China HV = Huaibei; Canadian MV = Luscar; Canadian LV = Elkview.
Clarkson Research Studies Nov-05Page 7
Coking Coal MarketLong Term Outlook
Contract Prices...
Who's Exporting More?...
US$/ton FOBT
154 154 153159
154 156 157160
165170 169
162
174169
173179
186192
200
80
100
120
140
160
180
200
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
e
2006
f
mt
FORECAST:Trade to increase 4% in 2006
o During the first three quarters of 2005, Australia exported 60.7mt hard coking coal, compared to 52.1mt in the same period of last year, according to latest ABS figures. Nevertheless, in September, there was a sharp fall from recent high levels of Australia’s monthly exports of high quality coking coal, and a surge in exports of thermal coal. This may reflect some fall-off in coking coal demand since port stocks also appear to be rising a little at the same time.
o According to Chinese customs statistics, in September, China exported 0.75mt of coke, compared with 0.8mt in August and a much higher volume of 2.06mt in September 2004, which was the highest monthly export volume in 2004. The year-to-date exports were 9.79mt in 2005 compared with 10.37mt of the same period of 2004.
o Russia's Yakutugol is reported to have concluded a new long-term supply contract for coal from Neryungrinsky K9 in Yakutia in eastern Siberia. It will supply Japan with up to 3mtpy of hard coking coal for the next five years. The terms of the new contract to begin next April are similar to those of the existing contract agreed in November 2000, i.e. they require the five Japanese integrated mills plus coke makers Nakayama Steel and Mitsui Mining to take a total of 2.50-2.75mtpy (plus-minus 10% at buyer’s option) between 2006 and 2010. According to the trade statistics of Russia, coking coal exports during January to September 2005 totalled 8.7mt, down 0.6mt (6.1%) from the same period one year ago. Out of that exports to Japan reached 2.4mt, up 0.6mt (33.6%) from the same period one year ago.
o Coking coal export stocks in Australia have risen for the third consecutive month. Metallurgical coal stocks are up from 6.3mt to 6.5mt in September, with the increases continuing to be driven by Queensland. This means metallurgical coal stocks have jumped by more than 60% from a historically low level of 4.0mt in June.
o According to the trade statistics of South Korea, coking coal import to South Korea during the first nine months of 2005 totalled 12.5mt, a 1mt decrease y-o-y. Imports from Australia in the same period were reported as 7.1mt, accounting for 56.6% of the total coking coal imports.
0
2
4
6
8
10
12
May
-97
Sep
-97
Jan-
98M
ay-9
8S
ep-9
8Ja
n-99
May
-99
Sep
-99
Jan-
00M
ay-0
0S
ep-0
0Ja
n-01
May
-01
Sep
-01
Jan-
02M
ay-0
2S
ep-0
2Ja
n-03
May
-03
Sep
-03
Jan-
04M
ay-0
4S
ep-0
4Ja
n-05
May
-05
mt/ month
Australia
USA
Canada
Imports to Import Trend Europe... Est. F'cast. Next Year v.
MCIS Index ^ 179.30 146.87 132.90 126.12 117.73 ^ Index based on Jan 1991 = 100. Source: McCloskey Coal
* Export Contract Base Price - NSW Benchmark-6700kcal/kg GAD - Historic prices from IEA;
Clarkson Research Studies Nov-05
Thermal Coal Market
Page 9
Who's Exporting More?...
Spot Prices...
Contract Prices...
Long Term Outlook...
US$/ton FOBT
0
3
6
9
12
15
3555
135
735
3591
636
100
3628
136
465
3664
736
831
3701
237
196
3737
737
561
3774
237
926
3810
838
292
3847
3
159
184201 206 207
216
242260
284 289304
350
387407
453
493506
475
100
150
200
250
300
350
400
450
500
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
e
2006
f
mt
FORECAST :3% growth in steam coal trade expected in 2006
o Chinese steam coal exports in the first three quarters of 2005 reached 46.4mt, suggesting that 2005 full year exports will reach only 60mt, down from around 73mt last year. They are likely to be no more than this in 2006 and may be less, according to Pan Wanze, VP of China Coal at an industry gathering in Beijing. With domestic prices higher than international prices, Pan said that it was unlikely that most exporters would source coal for export. At present the only company able to offer coal under the domestic price is Shenhua, which produces all the coal it exports. China Coal has its own production, but this is all sold out for 2006.
o In early November, port congestion at Newcastle eased significantly, with the number of ships waiting to load coal at the port falling to seven from a peak of more than 30 in mid-October.
o October was another strong month for Indian coal imports, with 3.7mt received, according to sources quoted by McCloskey. This brings year-to-date imports to 33.2mt, compared to 29.8mt for the whole of 2004. Steam coal accounted for 2.1mt in October, the second largest month so far this year. This brings year-to-date imports to 15.6mt against around 14.5mt for the whole of 2004. It is believed that total steam coal imports into India in 2005 will exceed 20mt, growing at least 5.5mt on 2004.
o The Richards Bay Coal Terminal is to expand its capacity to 92 mtpy by July 2008 from 72 mtpy as part of the long-awaited phase five expansion program, the terminal’s shareholders announced on November 2. Most of the new additional capacity is expected to go to black economic empowerment companies. The cost of the 1 billion Rand ($150 million) expansion will be shared by existing shareholders Anglo Coal, Xstrata Coal, Eyesizwe, Ingwe, Kangra Coal, Sasol and Total Coal.
o BHP Billiton’s thermal coal production rose to 24mt in 3Q 2005, compared with 23mt in the previous quarter and 20mt in 1Q 2005, as the firm accelerated its main South African operations and hit record output levels at its US and Colombian operations. Exports from the RBCT, where BHP is a major shareholder, rose to 5.4mt in 3Q 2005, up from 5.1mt in 2Q and 5.1mt in the 1Q. Exports during October and November are also expected to be strong on the back of additional buying from Indian end users.
Australia
USA
S. Africa
Indonesia
mt/month
China
Imports to Import Trend FSU/Europe F'cast This Year v.
Totals include minor importers omitted from tables. Oilseed not included; Crop Year = July/June. "Forecast; all figures for total Crop Year. Source : IGC, USDA.
Clarkson Research Studies Page 10 Nov-05
Grain Imports
Crop Year - Million Tonnes
Crop Year - Million Tonnes
Long Term Outlook...
Crop Year - Million Tonnes
Grain Trade News…
o The latest Grain Market Report by the IGC suggests that after two consecutive years of good wheat harvests, North African imports are expected to rebound by more than 1mt to 18.7mt in 2005/06, due to smaller crops in Algeria and Morocco. Sub-Saharan Africa is expected to import a similar amount to the previous year, although purchases by Nigeria could reach a new record as consumption continues to climb. The import number for Nigeria was revised, up by 0.4mt from last month, to 3.6mt (3.1mt last year), reflecting strong purchases to date, especially from the US. Iraq is expected to import 3.6mt, up from 2.9mt in last year.
216220
215 218224 221
205
216 219229 226
247
264 260
271264
273 275
160
180
200
220
240
260
280
300
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Wheat, Coarse Grain & Soyabean
mt
F'CASTFORECAST :1% increase in 2005
Imports to Import Trend S.America... F'cast This Year v.
o Although, in the market year of 2005/06, Australian wheat exports are likely to benefit from higher production and reduced Argentine competition in Asian and East African markets, this could be offset by smaller purchases in other key markets. China, Pakistan and Iraq, which last year combined to account for a quarter of Australian wheat exports, have reduced purchases to such an extent that Australian exports to these three markets during the first quarter of the trade year were down over 80% y-o-y. As a result exports are not expected to grow significantly, with the IGC forecasting Australian wheat exports at 16.0mt, up from 15.8mt in 2004/05.
-30 -25 -20 -15 -10 -5 0 5 10 15 20 25
EU
CIS & Other
Asia
Mid East
S.America
Africa
N/C.America
TOTAL
Panamax Employment in 2005/06
Inc reased P'Max demand in '05/06 by 3 vessels (basis
55,000t cargoes)
Wheat Trade Trends
Exporters... F'cast This Year v.97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 Last Year...
o According to the IGC’s Grain Market Report published in late October, shipments of wheat and wheat flour by the five major exporters in 2005/06 are expected to reach 81.5mt, down from last year's 85.2mt. The US export figure is forecast as 27.0mt, while that for Argentina is reduced to 6.8mt. The export forecast for CIS is 19.6mt, up by 4.5mt from last year.
o Brazil’s 2005/06 corn crop is estimated at 42.5mt, down 3% from last month, but up 21% from last year’s drought affected harvest. Harvested corn area is estimated at 12.8 million hectares, down 2% from last month, but up 12% from last year.
Country/Port Terminal/Berth Draft LOA Beam Draft Vessel Load... Load T/DaySouth AfricaRichard's Bay Coal Terminal 17.7 314.0 50.0 21.6 190,000 Up to ...... 50,000CanadaPrince Rupert Ridley Island Inc. 20.0 325.0 50.0 200,000 Up to ...... 50,000Vancouver Roberts Bank, Berth 1 21.0 350.0 53.0 19.6 230,000 Up to ...... 50,000
Specified Trade TrendMinor Bulk... 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006* Next Year v. ThisTOTAL... 714 697 686 709 712 718 754 776 783 797 STEADY 2%% Change... 0% -2% -2% 3% 0% 1% 5% 3% 1%+ Agribulks = Soymeal, Oilseed/meal, Rice; Totals may include tonnage moved in non-bulk vessels. DRI/HBI = Direct Reduced Iron/Hot Briquetted Iron.Fertiliser = Potash, Urea, Sulphur & Processed Phosphates (DAP, MAP, TSP). Excludes Phos. Acid + Phos. Rock. *Forecast; all figures for total Calendar Year.
Clarkson Research Studies Page 13 Nov-05
Million Tonnes
Million Tonnes
Million Tonnes
Long Term Outlook Commentary
Million Tonnes
615606605
597603
659
697699714
697686
709712718
754
776783
800
575
600
625
650
675
700
725
750
775
800
825
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
(e)
2006
(f)
110
115
120
125
130
135
140
145
150
155
mt m.dwt
F'cast
Ship supply 10-60K dwt
Reduced scrapping and steady deliveries increase supply in 2005
Minor bulk demandleft hand axis
o Japan is certain to break 2004’s record 6.4mt of scrap exports this year, sources quoted by SBB report. Japanese customs statistics show that total exports for the first seven months this year reached 4.39mt. Annualised, this would take 2005 calendar year exports to 7.5mt. Considering seasonal fluctuations and current weak demand, it is still believed that total exports will break the 7mt barrier.
o India imported 1.4mt of ferrous scrap from Europe in 1H 2005. That represents about a 250% increase y-o-y, according to figures from the German scrap federation (BDSV) presented at the Bureau of International Recycling (BIR) conference in Milan in late October.
80,000 dwt+ 2002 2003 2004 Jun Jul Aug Sep Oct This Year v. Last 2005Fleet Size 93.5 98.1 107.2 111.8 112.4 113.3 114.8 115.5 LARGER!! 10% 117.1Deliveries 4.1 5.4 7.9 4.6 5.3 6.3 7.5 8.1 LARGER!! 11% 9.8Scrapping 1.3 0.8 0.0 0.0 0.1 0.1 0.1 0.1 0.2Combos 0.9 3.4 4.3 4.2 3.3 4.1 3.4 3.5 SMALLER!! -21% 3.5Laid-up 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 STEADY 0% 0.1Storage 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 STEADY 0% 0.1Trading Fleet 94.1 101.3 111.4 115.8 115.4 117.3 118.0 118.8 LARGER!! 9% 120.5Orderbook 12.6 20.4 33.6 36.9 36.4 36.7 36.4 35.4 LARGER!! 16%Orderbook % Fleet 14% 21% 31% 33% 32% 32% 32% 31%YTD figures are shown for Deliveries and Scrapping. Fleet totals are metric tonnes and net of miscellaneous changes, which are not listed above. Total = vessels over 1
Clarkson Research Studies Page 14 Nov-05
End: m. DWT
End: m. DWT
Bulkcarrier Fleet
End: m. DWT
End: m. DWT
End: m. DWT
Handy/Handymax Fleet Trends
Panamax Fleet Trends
Capesize Fleet Trends
Clarkson Research Studies Page 15 Nov-05
Bulkcarrier FleetCommentary
Commentary
Commentary
0%
3%
6%
9%
12%
15%
Nov
-93
May
-94
Nov
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May
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Nov
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May
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Nov
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Combos as % of Handy fleetOrderbook as % of Handy fleet
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Combos as % of Panamax fleetOrderbook as % of Panamax fleet
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-05
Combos as % of Capesize fleetOrderbook as % of Capesize fleet
13 new Handymaxes were reported to have been delivered during October. As for Handysizes, there were six deliveries. Two Handysize vessels were sold for scrap in October. In addition, one Handysize was reported as being lost at sea. Now the Handymax sector has a fleet size of 1,380 ships of 65.2m dwt and the Handysize fleet includes 2,770 ships of 74.1m dwt. There were three new orders placed for Handymax vessels during October, making the sector�s orderbook now total 242 ships of 12.9m dwt. The Handysize newbuilding market also saw five new orders placed in the same month. Scrap & Delivery Watch � Year To 1st November 2005 Handymax vessels: 2 scrapped 80 delivered Handysize vessels: 8 scrapped 52 delivered
Three new Panamaxes were delivered during October, adding an extra 0.3m dwt to the fleet. So far this year, no ships have been sold for scrap. These changes have taken the fleet size to 86.2m dwt, consisting of 1,212 ships. 53% of the current fleet capacity is under 10 years old, while 23% of the fleet capacity is over 20 years old. Again, there were no new orders placed for Panamaxes during October. The total orderbook is now 167 vessels of 12.6m dwt. This represents 14.6% of the current fleet by deadweight. Scrap & Delivery Watch � Year To 1st November 2005 Panamax vessels: 0 scrapped + 2 combos
59 delivered + 0 combos
There were nine reported new deliveries during October, adding an extra 1.4m dwt capacity to the fleet. No demolitions happened during the month. As such the fleet stayed at 720 vessels of 115.5m dwt, 10% up y-o-y. 52% of current fleet capacity is aged below 10 years, with only 14% aged over 20 years old. There were another three new orders for Capesizes placed during October. The Capesize orderbook now consists of 242 ships of a cumulative 35.4m dwt. This represents 34% of the current fleet capacity, but 213% of the capacity of the fleet aged over 20 years. Scrap & Delivery Watch � Year To 1st November 2005 Capesize vessels: 1 scrapped + 2 combos 51 delivered + 0 combos
Bulk Fleet No. vessels No. vessels Fleet Growth %
Profile End of Year: End of Month: Year on Year2002 2003 2004 May Jun Jul Aug Sep Oct
Capesize…In October, transport costs increased notably for all the routes we cover. The Narvik/Rotterdam iron ore route continued to lead the way, with transport cost rising by 21% to $7.75 per 1,000t/mile. Cape coal transport cost increased by 10% to $2.85 per 1,000 t/mile. Panamax… Panamax costs also showed significant increases during October, as coal transport costs and grain transport costs rose by 12% and 11% on last month respectively. The cost of transporting maize US Gulf/Rotterdam increased by 20% over last month. Handymax… Handymax costs rose too, influenced by the larger vessel sectors. Scrap shipping costs made a modest advances while coal transport costs increased by over 20%.
Commodity Countdown
The fourth quarter is the boom season for US soybean exports. It accounts for about a half of US soybean ex-ports for the whole marketing year. Needless to say, it has been a major support to the shipping industry. However, so far this marketing year, the export peak has not reached the levels of previous years. What made this happen? New market year - a hard beginning Earlier this year, hurricanes caused significant disruption to US Gulf ports and their supporting barge sys-tems, which then created severe logis-tical problems for grain and soybean
exports. This is reflected in our Graph of the Month, which shows the export of US soybeans on a weekly basis. It illustrates the point that weekly exports so far this marketing year are lower than those in past two years. Exports did not start to pick up until October 6, when port and barge operations got back to normal levels. However, just one week later, bird flu made its presence felt, creating a dark shadow over the poultry industry, and consequently, over soybean imports. Its impact was most evident in the EU. By the week ending October 27, accumulated US exports to EU were only 32% of the figure registered at
the same time last year. Ample supplies Nevertheless, this year, the US soybean crop provided well, thanks to good weather during harvesting. Last month, the USDA forecasted that exports for the 2005/06 marketing year would reach 30.3mt. If that volume is realised, then the United States’ status as No. 1 soybean exporter would remain unchallenged. Meanwhile, harvests in Brazil and Argentina, the world’s second and third largest soybean
exporters, are also believed to be quite good, helping maintain ample supplies. Consequently, it is unlikely that the availability of soybeans will become an issue as the marketing year pro-gresses. So it is not very surprising to see that as prices drop, in response to the bird flu induced weakening of demand, import levels have been fur-ther restricted as buyers have seen an opportunity by holding back on pur-chases for as long as they could. But if the bird flu factor is limited or short term and buyers have mis-read the market things could change rap-idly. Traders and ship owners could well see the benefits of the peak in US soybean exports delayed until later in the season. Sunshine after the rain From past experience, for example the BSE crisis, we know that the im-pact of bird flu could be short lived and that it might not be long before there is a recovery in meat demand, and in the demand for soybean and other feed grains to support it. This is especially true when the global econ-omy is performing well. So, once soybean prices have reached bottom and the threat from bird flu is rolled back, then buyers will return to the market and exports will rebound. And, as usual, there will be sunshine after the rain.
An Eventful Year for Soybean Exports
Graph of the Month
US Soybean Weekly Net Sales
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Source: Clarkson Research Services
m. tonnes
2005/062004/052003/04
Dry Bulk Trade Outlook, November 05 Managing Director Martin Stopford Published by: Publisher Cliff Tyler Clarkson Research Services Ltd. Editor Jin-Hyun Bae St. Magnus House, Analyst Cheng Zhang 3, Lower Thames Street, Research Services Steve Gordon LONDON EC3R 6HE, England. Production Preet Patel Tel: (44) (020) 7334 3134 Dry Cargo R.G.J.Poyntz Fax: (44) (020) 7623 0539 Capesize N.P.Collins Telex: 8812927 CLTNKA G Coal R. Elphick Grain M.G.Grimwade E-mail: [email protected] Panamax D.Brough Web-site: http://www.clarksons.net Handymax S.D.Emmott http://www.crsl.com Freight derivatives I.Bland
Dry Bulk Trade Outlook is published twelve times a year. It reviews dry bulk supply & demand, commodity news and developments in the markets. There is also a monthly analysis of the fleet & orderbook, split into twenty size groups. It is available on subscription at a price of £440 a year, plus postage. Whilst care has been taken in the production of this review, no liabil-ity can be accepted for any loss incurred in any way whatsoever by any person who may seek to rely on the information contained herein. The information in this report may not be reproduced without the written permission of Clarkson Research Studies.