Friday Big Picture Report
Our Market Outlook Part 1
The supply side of the market
We are now over halfway through the year and have updated our supply and demand model since our last review at the end of Q1 this year.
We look to 2018 and beyond with tempered optimism. Over a two-week, two-part review, we start by outlining our supply forecasts. Next week we detail our demand and utilisation expectations.
LNG as a Marine Fuel
LNG – a viable solution?
Just two and a half years away from the 0.5% sulphur cap regulations, questions about the adequacy and accessibility of compliant fuels remain. LNG provides the shipping industry with an option that has the potential to meet the industry’s environmental and economic objectives. What is the case for it and against it?
Trump’s Pending Crackdown on Steel Imports
Not as simple as it looks
President Trump has launched a Section 232 investigation into whether imports of steel and aluminium products into the United States poses a threat to national security. While this is primarily a political action aimed at restoring industrial output (putting America first), it has many wrinkles and could end up hurting dry bulk shipping. The initial talk was that a report could be ready as early as June but delays suggest that some issues are proving to be more problematic. We limit our commentary this week to steel. Aluminium is another story.
Bunker fuels in 2020
ULSFO weakens the scrubber case
Most of the discussion on the requirement for low sulphur bunkers post-2020 has looked at the play-off between installing a scrubber and using high-priced, low sulphur distillate fuels. But is there a third way? Experience from Europe’s Emission Control Area (ECA) suggests there is room for a compliant and cheaper fuel oil based bunker which, if replicated globally, could hit scrubber uptake. We look at the dynamics of this option.July 27th
Mini Cape Market Overview
Finding their niche
This week we take an in-depth look at the Mini Cape sector. By analysing the fleet’s movement using AIS records, we have been able to gain an insight into the drivers of demand in the market and map out the key trading patterns. We also discuss developing trades and what the future holds for the fleet.July 20th
Growing Soybean Trade
Full of beans
With a wide range of uses, the humble soybean has become a major driver of demand over the past decade for the Panamax and geared fleets. The commodity has experienced the fastest expansion of planting area relative to other agricultural crops and shipments now make up a quarter of total seaborne agri-bulk demand, with growth forecast to continue into the future.July 13th
Reversing the ageing process
Over the past 8 years, the bulk fleet has hit achieved a feat we all dream of — it has managed to reverse the aging process. But getting younger isn’t all positive, particularly when rates are low and the pool of obvious scrap candidates is quickly running dry.
Chinese Coal Port Ban
Changing the rules
In early May, we wrote about how Chinese policy decisions were having a knock on impact on the freight market, concluding with the following comments… “[the] biggest concern for the future of the freight market [is] the ability of the Chinese government through its policy decisions to control how it moves. Whilst there is no implication that the Chinese government is looking to directly impact on international seaborne freight rates, the tools it uses to control the domestic economy can only be finessed to a degree and there are inevitable knock on impacts into dry bulk”June 29th
The Growing Orderbook
Bigger than before
So far this year, we count 26 confirmed new orders for dry bulk vessels. This is a pretty derisory number and continues a trend running from the start of 2016, since when orders for just 43 ships have been placed — easily the lowest 18 month total in the last 40 years. This is good news for those worried about future deliveries tipping the supply-demand balance in an unfavourable direction, but it is clearly not enough to keep the shipyards busy, even with an uptick in ordering in other vessel sectors.June 22nd
Coal’s Diminishing Role
BP released their annual “Statistical Review of World Energy” this week. In terms of the impact of the energy markets on bulk carrier demand, its is changes to patterns of coal consumption and trade that matter the most. We present some of the key highlights of the report and related information below, along with our analysis and interpretation of what it means for the bulk market.June 15th
Event Impact Analysis
- Chinese steel prices at four year high August 16th
- Chinese iron ore imports fall August 16th
- Fourth quarter grain trade August 16th
- US June coal exports up 34.7% year-on-year August 16th
- Chinese July power output up 12% on year August 16th
- Chinese July coal imports down month-on-month August 16th
- August 8, 2017 August 9th
- Brazil corn export season starts August 9th
- Iron ore trade data August 9th
- Iran to raise iron ore production August 9th
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