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Dry-Bulk Shipping In Troubled Waters As Glut Of Vessels Soaks Up Demand

Dry-Bulk Shipping In Troubled Waters As Glut Of Vessels Soaks Up Demand

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Price $530.00
Meta Description Strong Demand Still Can’t Soak Up Glut
BMI expects the dry bulk shipping sector’s woes to continue for some time to come, with
Publisher Business Monitor International
Date of Report Oct 6, 2011
Quick Overview
Strong Demand Still Can’t Soak Up Glut
BMI expects the dry bulk shipping sector’s woes to continue for some time to come, with overcapacity continuing to upset the supply demand equilibrium. Despite strong global demand for dry bulk commodities such as grains, coal and iron ore, the glut of vessels available keeps driving rates down. Dropping rates have already claimed their first scalp in the form of Korea Line, and we believe that there could be more victims to follow if lines do not reduce capacity. Drivers Key Views • Dry-bulk shipping to benefit from projected increase in iron ore and coal production
• Robust Asian demand for coal and iron ore to continue over medium term
• Global grain production is set to increase on last year Capacity Key Views
• Overcapacity to remain the single biggest concern for the sector
• Fear of further overcapacity with new-build orders equivalent to 20% of the current fleet due online in 2011
• Slow-steaming and idling likely to increase to bring overcapacity under control Rates Key Views
• Volatile outlook as the supply/demand imbalance remains
• Given rate plunges we have seen, another scenario similar to the collapse of dry-bulk shipper Korea Lines cannot be ruled out
• In the short term, lack of demand from Japan will exacerbate the existing imbalance between vessel supply and demand
• Rates will pick up over the longer term as Japan’s power plants and steelmakers recover and look to restock depleted and destroyed inventories.
Table of Contents
Executive Summary ................................................................................................. 5
Overview................................................................................................................................ 5
Strong Demand Still Can’t Soak Up Glut .................................................................................................................. 5
Drivers.................................................................................................................................... 5
Key Views ................................................................................................................................................................ 5
Capacity.................................................................................................................................. 5
Key Views ................................................................................................................................................................ 5
Rates....................................................................................................................................... 5
Key Views................................................................................................................................................................. 5
Global Industry Overview ....................................................................................... 6
Dry-Bulk Shipping Overview .................................................................................................. 6
Overcapacity Woes To Continue .............................................................................................................................. 6
Drivers.................................................................................................................................... 6
Key Views ................................................................................................................................................................ 6
CHART: Feeding The Dragon........................................................................................................................................................6
Chinese Iron Ore Imports, Tonnes
Capacity.................................................................................................................................. 6
Key Views ................................................................................................................................................................ 6
Order book Offers Little Comfort ............................................................................................................................... 7
CHART: Overcapacity Threatens ..............................................................................................................................................7
Global Dry Bulk Order book
Dry Bulk Loses Its Balance ..................................................................................................................................... 7
CHART: Newer Vessels Take Biggest Slice of The Pie ........................................................................................................7
Age of Vessels In Global Dry Bulk Fleet
Lower New-Build Prices Reflect Concerns About Bottom Lines .............................................................................. 7
CHART: New build Prices Take A Dive ......................................................................................................................................8
Capsize New build Prices (US$bn)
Rates....................................................................................................................................... 8
Key Views ................................................................................................................................................................ 8
CHART: Rates Keep Sinking ........................................................................................................................................................8
Baltic Dry Index
Plunging Rates Claim First Scalp, More To Follow? ................................................................................................ 8
CHART: Stocks Plunge On Back Of Sinking Rates................................................................................................................9
Eagle Bulk & Korea Lines Share Prices
Japan Presents Short-Term Downside Risks With Long-Term Upside Potential ..................................................... 9
Troubled Waters Ahead ......................................................................................................................................... 10
Company Profiles................................................................................................... 11
COSCO (Dry Bulk).................................................................................................................. 11
Overview ................................................................................................................................................................11
Strategy - Fleet .......................................................................................................................................................11
Routes ....................................................................................................................................................................11
Financials .............................................................................................................................................................. 12
Latest Activity......................................................................................................................................................... 12
4 Business Monitor International Ltd
Dry-Bulk Shipping In Troubled Waters As Glut Of Vessels Soaks Up Demand
NYK Line............................................................................................................................... 13
Overview ............................................................................................................................................................... 13
Strategy ................................................................................................................................................................. 13
Financials .............................................................................................................................................................. 14
Latest Activity ........................................................................................................................................................ 14
Three NYK Vessels Damaged By Quake............................................................................................................ 14
NYK/Tata Steel JV Set For Expansion................................................................................................................ 14
Navies Maritime Holdings.................................................................................................... 15
Overview ............................................................................................................................................................... 15
Strategy ................................................................................................................................................................. 15
Financials .............................................................................................................................................................. 15
Latest Activity ........................................................................................................................................................ 16
Excel Maritime Carriers......................................................................................................... 17
Overview ............................................................................................................................................................... 17
Strategy ................................................................................................................................................................. 17
Financials .............................................................................................................................................................. 17
Latest Activity ........................................................................................................................................................ 17
DryShips............................................................................................................................... 18
Overview ............................................................................................................................................................... 18
Strategy.................................................................................................................................................................. 18
Financials .............................................................................................................................................................. 18
Latest Activity ........................................................................................................................................................ 18
Global Assumptions............................................................................................... 19
Global Outlook...................................................................................................................... 19
Japan Quake Adds To Global Risks ....................................................................................................................... 19
Developed States................................................................................................................................................... 19
Emerging Markets.................................................................................................................................................. 20
TA BLE : GLO BAL ASSU MPTIONS .....................................................................................................................................................19
indicators: Real GDP Growth (%), Consumer Inflation (avg), Interest Rates (Eop), Exchange
Rates (avg), Oil Prices (avg)
table: EMERGING MARKETS AGGREGATE GROWTH .................................................................................................................20
indicators: Emerging Markets Aggregate Growth
Latin America - Argentina, Brazil, Mexico
Middle East
Africa - South Africa, Nigeria, Saudi Arabia, UAE
Emerging Asia - China, Hong Kong, Indi a*, Indonesia, Malaysia, Singapore, South Korea, Taiwan
Thailand
Emerging Europe - Russia, Turkey, Czech Republic , Hungary, Poland
table: DEVELOPED STATES REAL GDP GROWTH FORECASTS ................................................................................................. 21
indicators: Developed States Aggregate Growth - G7, Eurozone, EU -27
Selected Developed States - Australia, Austria, Belgium, Canada, Denmark , Finland, France
Germany, Ireland, Italy, Japan, Netherlands, Norway, Portugal, Sp ain, Sweden, Switzerland
United Kingdom, United States of America
table: CONSENSUS FORECASTS .................................................................................................................................................. 21
indicators: 2011 - Bloomberg Consensus, BMI 2012 - Bloomberg Consensus, BMI




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