Archives for category: Bulkers

Every year, readers of the Shipping Intelligence Weekly are invited to submit their predictions of the value of the ClarkSea Index at the start of November the following year. Last week the ClarkSea Index stood at $12,323/day, up 31% on the 2016 average level. This reflects some improvements in shipping market conditions, but how did it match up to the views of the entrants in our competition?

For the full version of this article, please go to Shipping Intelligence Network.

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Following the lowest year of contracting volumes for over thirty years in 2016, newbuilding market observers could have been forgiven for not looking too hard every month for signs of improvements on last year’s figures. In the early part of 2017 they would probably have been justified, but with more positive sentiment building, recent months have seen an increasing degree of upside on last year.

For the full version of this article, please go to Shipping Intelligence Network.

 

When shipping markets start to move into the next phase of the cycle following a downturn, sometimes the percentage increases in earnings can look very impressive indeed. But of course they’re generally from a low base. With some of the shipping sectors now moving into a new phase, how else might the improvements be put into a helpful context?

For the full version of this article, please go to Shipping Intelligence Network.

Historically, the fuel of choice for the vast majority of large cargo ships has been heavy fuel oil. But in 2020, sulphur oxide emissions will be capped to 0.5% by IMO convention, ruling out current standard grades of HFO. Both fuel consumers in the shipping industry and producers in the refining industry have now had a little time to consider the potential options to deal with the imminent regulatory change…

For the full version of this article, please go to Shipping Intelligence Network.

Since remote antiquity the essential importance of energy to human civilization has been well appreciated: in ancient Greek mythology for example, it was the secret of fire that the Titan Prometheus stole from the gods and gifted to mankind. Today the still increasing energy needs of humanity are greater and more diverse than ever before. And in this energy tale, shipping of course plays a titanic role…

For the full version of this article, please go to Shipping Intelligence Network.

 

By the late 1800s, the shipping industry had been transformed by the introduction of steam power and iron ships. Coal and grain were two of the most important cargoes, alongside timber, sugar, cotton and tea. While technology, the sheer scale of the business, and the global cargo mix, have of course all changed since then, dry bulk cargoes have retained a position at the heart of global seaborne trade.

For the full version of this article, please go to Shipping Intelligence Network.

In the metal and mineral bulk trades, as in the heavy metal music scene, a few very big names often end up dominating the headlines: metal has the likes of Metallica, Rammstein and Judas Priest; mining bulk has iron ore and coal. But in both cases, the triumphs and travails of the smaller names can often be just as riveting and indicative of the broader trends as those of the superstars…

Atlas, Rise!

The ‘mining bulks’ consist of the metallic and mineral outputs of the extractive industries (and substitutes such as scrap metal destined for blast furnaces) typically shipped in bulkcarriers. Seaborne trade in mining bulks is projected to stand at 3,415mt in 2017. Unsurprisingly, the ‘mining’ major bulks of iron ore and coal predominate in the forecast. Even so, ‘mining’ minor bulks (a range of commodities utilised primarily in metallurgy such as bauxite, manganese ore, nickel ore, copper concentrate and coke) still make up a respectable 22% of the projection. As part of the cargo creating demand for a bulker fleet of over 11,000 vessels, the mining minor bulks are no minor matter.

As for demand for the mining minor bulks, while there are numerous importers, China has been the main driver of seaborne trade growth. Since the start of the century, seaborne trade in mining minor bulks has increased at a CAGR of 3.4% whereas imports into China have grown at a CAGR of 16%. The disparities are just as apparent in specific areas such as bauxite/alumina (4.5% versus 21%) and other non-ferrous ores (8.5% versus 20%, with metals like manganese used in steel alloys). Indeed, China accounts for more than 50% of growth in seaborne mining minor bulk imports since 2000. Just as in shipping and seaborne trade generally, China has played a key role in mining minor bulk trade growth.

Reise, Reise

The picture is more complex on the supply side, with mining minor bulks sourced from a range of countries, none accounting for more than 9% of total exports. Developing countries are prominent. For example, the Philippines is projected to account for 75% of nickel ore exports in 2017, Guinea for 45% of bauxite exports and Chile for 38% of copper concentrate exports. Some developed economies like Australia are involved, but on the whole, trends in mining minor bulk further confirm the ongoing diversification of shipping trade networks, particularly between China and other developing economies.

Metal Meltdown

As the Graph of the Month shows, mining minor bulk trade can also be very volatile, another common feature of seaborne trade. Mining minor bulk volatility is in part due to political risk factors such as strikes and government policy. Indonesia accounted for 57% (65mt) of seaborne nickel ore exports in 2013; by 2015, it was exporting no nickel ore at all following the mineral ore export ban introduced to boost the domestic smelting sector.

So the mining minor bulks are in sense akin to more obscure heavy metal bands. They may be complex and often idiosyncratic but certain key themes are apparent: the impact of China, the emergence of new trade patterns and market volatility, each illustrating broader trends in shipping too. Have a nice day.

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