Professional Documents
Culture Documents
Review 2008
HSBC Shipping Services
No part of this publication may be reproduced, stored in a retrieval system, be transmitted in any form or by any
means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of
HSBC Shipping Services Limited.
Produced by Aura Design Limited, London 03/08 AD1015
Contents
Issues 6
Bulk Carriers 18
Tankers 41
Containerships 62
Shipbuilding 84
Conclusion 98
These supply interruptions coincided with ongoing price of houses as secondary ATMs, and unsecured credit in the
negotiations between the shippers and China’s leading form of credit cards and loans is now less widely available
steelmakers with the iron ore sellers rumoured to be and is also more expensive. In the meantime, the export
wanting a 70% increase on 2007/8 FOB contract prices. economies of Asia that have accumulated huge dollar
The new price would commence 1st April 2008 and would trade surpluses are now faced with the task of generating
still be cheaper than inflated spot market prices which were increased domestic demand (consumer spending and
double or more the old contract price. With the tolerance investment) in order to compensate for this altered state.
If part of the accumulated savings in countries such as diverted to ethanol for transportation and as Asian diets
Germany, China and the Middle East could be teased out become more grain and meat intensive. The coals and
into the economy then there would be less chance that the iron ore raw materials that are needed for steelmaking and
current reflationary actions in the US will simply be delaying power generation are rising sharply, with iron ore contract
the final point of reckoning. A retooling of global demand prices up 65% year-on-year in 2008/9 and thermal and
and spending has the potential to iron out the severe trade coking coal spot prices at double last year’s contract prices.
imbalances that have built up in recent years. China will Steel prices and base and precious metals are all rising,
have a forecast current account surplus of about $380 nothing is left untouched.
and the Middle East stepped in to prevent a financial crisis by 6.9% in 2008 after 7.8% in 2007. Developing Asia is
forecast to fall from 9.6% to 8.6% while China will slip from
that began in the US from becoming a global economic
11.4% to just 10.0%. Africa is predicted to grow from 6.0%
meltdown. They have used dollar gains that have been
to 7.0% and the Middle East to maintain momentum by
accumulated from selling manufactures, services, oil and
posting 5.9% in 2008 after 6.0% last year.
gas to the transatlantic economies, to shore up their own
interests as stakeholders in the global trading system in With slower growth in the developed world economies
which each needs the other in an increasingly connected the degree of China’s dependence on exports becomes a
world. Meanwhile, the paradoxical decoupling process relevant debate, although there is no consensus as to its
has really proven to be a link-chain of opposites: saver true extent. In 2007, total exports were about 1.3 times
and spender, seller and buyer, surplus and deficit, lender total imports but in the last quarter imports exceeded
and borrower, rescuer and rescued. They have become exports by value in each of those three months. It is also
worth bearing in mind that China is a large processing
positioned at opposite poles of what appears to be a zero
centre at the heart of an Asian swap-shop that imports,
sum trading game. In order for the game to continue, an
exports and re-exports raw materials, semi-finished and
orderly reversal of roles is required to create better balance
finished products. The earliest manifestation of this was
and in a more stable and sustainable trading environment.
in the 1980s when traders would fund the purchasing of
Decoupling and globalisation are but opposite sides of the
iron ore for cash-strapped Chinese steel mills and only
same coin. get payment, plus margin, some months later when the
exported pigiron or finished steel was paid for by, for
How Reliant is China on Exports? example, the Japanese purchaser. The system is now
much more complicated and the traded goods range
China is credited with having generated as much as
from low-value to high-tech.
80% of the growth in dry bulk demand over the past five
years. Thus, if China were to be severely impacted by a Headline figures suggest that China’s exports surged
US recession then we could expect the dry bulk trades from 20% of GDP in 2001 to almost 40% in 2007, making
to suffer in tandem. In attempting to assess the risks to exports a key driver of growth and implying that the country
Chinese growth it is worth remembering that GDP has is vulnerable to a consumer slowdown in the US and
expanded at a trend rate of 8% over the last thirty years Europe, the main recipients of the finished goods. However,
since Deng Xiao Peng opened the country up to foreign a recent study by The Economist concluded that the 40%
trade in 1978. In recent years China has enjoyed accelerated figure is misleading as it does not compare like with like,
exports being measured as gross revenue while GDP is
double-digit growth with an estimated 11.4% in 2007.
Most forecasters do not expect a fall below 10% in 2008 as measured in value-added terms. If exports are measured in
4
Based upon Revised Purchasing Power Parity
In 2007, US ethanol production accounted for about 60% complications. On Friday, 1st February, Shining Path (a
of the global increase in corn consumption, according to combination of China’s Chinalco and America’s Alcoa)
the IMF. Corn-based ethanol production has been rising swooped on 12% of Rio’s London-listed shares, acquiring
at 20% per annum since 2002 and is pushing up cereals 9% of the whole in the process, at £60 per share in a
prices globally. As farmers switch to planting more corn, total outlay of £7.18 billion ($14.1bn). The dawn raid was
at the expense of wheat and soyabeans, so does the price performed only days before expiry of the deadline for
of the replaced grains and oilseeds rise as shortages are BHP to launch an official bid for Rio. Vale’s complication is
created. The Energy Independence Act of December 2007 that it has to meet the value expectations of Swiss-based
mandated that current corn-based ethanol production of Glencore, which has a 35% stake in Xstrata. The China
27bn litres should rise to 136bn litres by 2022, with half of it Development Bank, which bankrolled Chinalco’s raid on
made from cellulose, despite the fact that this is years away Rio, is known to have approached Glencore with a view to
from economic production. This still requires a 2.5x increase buying its £14bn stake in Xstrata.
The ‘Chindia’ effect pits man against machine. Increased in leaps and bounds over the past ten years as production
demand for corn and soya-fed livestock and poultry has failed to keep pace with demand. For the 2008/9
competes with increased demand for biofuels that already contract year it is up another 65-71% leaving China’s steel
consumes 20% of the US corn crop for ethanol production. industry, and the country’s entire modernisation program,
This in turn puts pressure on land and water resources as exposed to sharply rising and inflationary cost pressures.
both farming and ethanol production are independently Under such circumstances, China is rightly alarmed at the
massive consumers of water. Without the help of vast prospect of consolidation of the world’s largest suppliers of
subsidies, and punitive tariffs on inbound Brazilian sugar- iron ore, coal and base metals such as copper, aluminium
based ethanol, the numbers simply do not add up for and zinc all of which are required inputs for China’s rapid
ethanol. The pollutive production process, low power infrastructure expansion. The stake in Rio and discussions
efficiency relative to gasoline, and its impact on water with Glencore can be interpreted as moves by China Inc,
supplies make ethanol a disastrous and misguided policy. the ultimate funder, to prevent a reduction in the number of,
The intensity of water use in the ethanol, oil and tar sands and competition between, iron ore suppliers.
reserves one can expect this firepower to be used in 2008 in the wake of US subprime mortgage problems and the
and beyond to protect its best interests. The move on ensuing liquidity crunch. Banks became reluctant to lend
Rio’s London share base in conjunction with Alcoa was to each other and to their retail and corporate customers.
designed to head off Australian and American suspicions Many companies have built up cash reserves in recent
as to Chinalco’s final intentions. It represents a more years in contrast to a swathe of consumers that have
sophisticated approach than CNOOC’s failed attempt to buy taken advantage of rising house prices to cash in equity.
Unocal in 2005 when protectionism triumphed and Chevron They have also built up unsecured debt through personal
won the prize. loans and credit cards and this tendency in the transatlantic
economies to spend at the expense of saving has fuelled an
Further twists in this saga lie ahead. On 5 February, we asset bubble in property and shares. Now that asset prices
heard that Chinalco’s purchase of 9% of Rio may become are being undermined, the old adage that cash is king is
the subject of an investigation by Australia’s Foreign reasserting itself. This manifests itself via increased savings
Investment Review Board in case it is deemed to be and or heavier weightings in investment portfolios towards
counter to Australian national interest. Recent precedent for cash and bonds and away from equities. Equity markets are
government intervention on national interest grounds was no longer getting the same level of support that they did
set in the US in the above-mentioned CNOOC/Unocal case. previously from M&A activity and share buybacks.
This was followed by the UAE-controlled DPW being forced
to divest the US-based port content (it went to AIG) after its In the absence of the availability of large leveraged loans,
purchase of the global ports portfolio of P&O Ports. mergers and acquisitions need to be paid for in cash, or
An Australian precedent was to block Royal Dutch Shell shares, or cash and shares. Big deals are still in prospect
from its planned A$10 billion takeover of Woodside with BHP looking at Rio, Vale at Xstrata and Microsoft at
Petroleum, the Australian oil and gas group, in 2001. Yahoo. But, one large US investment bank had to withdraw
Then, in February, Cfius blocked the joint Huawei/Bain bid from leading a syndicate in one of these potential takeovers
for US computer company 3Com. The question remains as because it could no longer justify lending in the context of
to whether these transactions were really blocked by issues its own weakened balance sheet and forecast returns. The
of national interest or whether they were thwarted by anti- shortage of cash on the balance sheets of some banks is
commercial and protectionist practice. contrasted by the availability of cash in the sovereign wealth
funds of Asian, Middle Eastern and other emerging market
Turning to the performance of the various bulk carrier The main market driver continued to be China whose
segments in calendar 2007. Spot capesize earnings were economy grew by 11.4% in 2007 following on from 11.1%
159% up on 2006 and 59% up on 2004 at just under in 2006. The strength of Chinese demand growth for raw
$112,000 daily. The equivalent figures for panamax were materials for use in steelmaking and power generation
up 130% on 2006 and 44% on 2004 at nearly $49,500 per is occasionally outstripping the market’s ability to supply
day and handymax came in 110% up on 2006 and 49% up these goods. Infrastructure capacity constraints from mine
on 2004 at just over $47,500 daily. Finally, the handysize to railway to port are causing commodity supply to lag
segment registered a 99% gain on 2006 with average demand. When this leads to port delays, reducing effective
earnings coming in at a little under $31,500 daily. tonnage supply, shipping rates benefit, but when this leads
This was 62% up on the previous cyclical peak in 2004 to shipment cancellation, shipping rates suffer – as became
of just over $19,300 daily. The BDI ended 2007 190% all too obvious in January 2008.
up on 12 months earlier.
Supply
Figure 2. Dry bulk carrier supply
Our assessment of the dry bulk fleet and orderbook splits The newest and most popular segment is the post-panamax
the segments into sizes that reflect changes in design and 80-100,000-dwt size range where orders account for 235%
a creeping tendency to upsize. The fleet of very large bulk of the end-2007 fleet, massive future expansion from a low
carriers over 200,000-dwt grew by 26%, in deadweight base. The kamsarmaxes within this segment are still within
terms, during 2007 while the orderbook stands at 131% current Panama beam.
of the end-2007 fleet. The delivery schedule is stretched
out over five years and its size reflects the rising The conventional panamax segment of 60-80,000-dwt
importance of longhaul iron ore trades and the pursuit of expanded by almost 7% in 2007 but the orderbook stands
economies of scale. The largest ships on order are four at only 15% making it look relatively neglected. In reality,
388,000-dwt vessels at Bohai for BW Ltd for delivery in many owners now prefer ships larger than 80,000-dwt
2011. They are under contract to Vale for a long-term when imagining what will be the most flexible ship of the
Brazil/China iron ore COA. future as, after 2014, this segment will no longer be able
to call itself panamax. The handysize segment is still the
The conventional capesize segment, falling in the 100- quickest to age and the slowest to grow with the orderbook
200,000-dwt range is most heavily populated by ships in the at only 26% of the fleet and an age profile that offers
170-180,000-dwt size range which still offer the greatest abundant scrapping potential.
flexibility to both shippers and receivers. The fleet grew by
6% in 2007 while the forward orderbook sits at 79%.
m-dwt
30
Handysize
Handysize Handymax
25
Handymax Panamax
Panamax Post-Panamax
20
Capesize
Post-Panamax
VLBC
Capesize 15
VLBC
10
5
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
The very large bulk carrier deliveries of recent years are and the 1980s models will soon become marginalised,
sufficient in capacity to replace all the extant ships that especially the less fuel-efficient ones. The handysize fleet
delivered m-dwt
in the 1980s and 1990s, although their owners stands out as having delivered insufficient ships in recent
30
probably have no plans to scrap them any time soon. The
Handysize years to renew the fleet going forward. The relatively light
phased
25
arrival of the orderbook will certainly put the older
Handymax orderbook suggests that some ships will continue to be
ships underPanamax
pressure. The conventional capesize fleet has employed well into their 30s.
Post-Panamax
enjoyed
20 a fairly linear rate of deliveries since the mid-1990s
Capesize
VLBC
15
Figure 4. Dry bulk capacity scrapped, lost or otherwise removed from the fleet
10
m-dwt
14.0
5 Handysize
12.0 Handymax
10.0 Panamax
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Capesize
8.0
6.0
4.0
2.0
0.0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Strong markets since 2003 have reduced scrapping to a sector were to suffer the equivalent of an Erika, Prestige
bare minimum with 2007 being noteworthy for the high or Hebei Spirit moment then we could expect a swift
proportion of superannuated panamaxes that left the active tightening of qualifying employment parameters and a
fleet. The positive message to be taken from low recent return to the former classification of modern (maximum
levels of scrapping is that it provides the safety valve of 15 years), a definition that has become overlooked in the
increased scrapping in future, and this may be needed handysize segment.
judging by the weight of the orderbook. If the bulk carrier
2
Bulk Carriers
600
Handysize
500 Handymax
Panamax
400
Capesize
300
200
100
0
2003-Q2
2003-Q3
2003-Q4
2004-Q1
2004-Q2
2004-Q3
2004-Q4
2005-Q1
2005-Q2
2005-Q3
2005-Q4
2006-Q1
2006-Q2
2006-Q3
2006-Q4
2007-Q1
2007-Q2
2007-Q3
2007-Q4
2008-Q1
The surprising strength of earnings and values in 2007 Figures for the first quarter of 2008 show a distinct
encouraged an avalanche of orders that reached its peak slowdown on a quarter-on-quarter basis with the number
in the second quarter. Such a development could not have of orders placed at a little over one hundred compared
happened without the acquiescence of the shipyards with about 260 in Q1 2007. It could be that owners,
which finally achieved pricing levels that permitted them following recent corrections in spot market earnings and
to dovetail rising bulk carrier demand with easing tanker the indices, have finally decided that enough is enough.
and box ship demand. The paucity of contracting prior to Other considerations could be that financing is no longer
end 2006 is testament both to shipyards’ unwillingness as available on acceptable terms, that deliveries are too
to build bulk carriers and their obsession with the other far out, that yards are reluctant to quote as their input costs
aforementioned sectors. A lot of the most recent bulk keep rising and that there are fears about the deliverability
carrier orders have been placed in China. Not all will deliver of ships from some of those yards that are still willing
on time, or indeed, at all. to quote.
The post-panamax fleet grew only marginally in 2007 but Korean, Chinese, Taiwanese, Italian, UK, Croatian and Arab
the order pipeline begins to deliver in 2008 and net fleet interests. In the conventional panamax sizes we forecast
expansion of 24% is anticipated in what is still a small fleet. minimal scrapping and net fleet growth of under 5% in 2008
The new deliveries are dominated by Japanese owners but after almost 7% in 2007, leaving us with quite a benign
overall ownership is quite diverse with it spanning Greek, supply-side outlook for the year ahead.
The handymax fleet grew by 7.5% in 2007 which had into insignificance when compared with the 13.4-dwt of
no adverse impact on either earnings or values. With our scheduled deliveries in 2009 and a further 13m-dwt in
expectations of resilient earnings in 2008 we see little 2010. Handysize fleet growth remained slow at just over
scrapping potential and this will give rise to an even larger 3% in 2007 and is forecast to pick up slightly to nearly
net fleet expansion of 10% this year. Anyway, this pales 4.5% in 2008.
The total dry bulk fleet expanded by less than 7% in 2007 by returning all-time record earnings and values. We still
and is expected to increase by about 7% in 2008. Dry bulk expect a good performance this year despite the uncertain
shipping demand
m-dwt
growth is likely to be slower this year outlook in the developed world economies and financial
30
as the global economy
Handysize
faces a slowdown. However, the markets which, in any case, often dance to a different
sector coped admirably
Handymax with 7% supply growth in 2007 tune to shipping.
25
Panamax
Post-Panamax
20
Capesize
Demand VLBC
over 5%. This figure does not tell the whole story as tonne-
15 mile demand growth and real tonnage supply, stripping
In 2008, we expect to see continued growth in both major out the limiting factors of port congestion, bad weather
and minor
10 bulk demand, although at a slower pace than and canal transit bottlenecks, all influence the end result.
in recent years. The previous cyclical peak in dry cargo Given our 2008 forecast of cargo demand growth falling to
demand
5 growth was in 2004 when it rose 8% year-on-year.
just under 5%, and net tonnage supply expansion staying
However, 2007 set records in both earnings and values constant at about 7%, those supply-limiting factors will
despite a lower rate of estimated demand growth of just once again play an important role in closing the gap.
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 10. Dry bulk demand growth forecasts for 2008
Estimate of Dry Cargo Demand Growth
change over
previous year
9% m-t
8% 2,300
Major bulks
7% 2,100
6% Minor bulks
1,900
5% 1,700
4% 1,500
3% 1,300
2% 1,100
1% 900
0% 700
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008f 2002 2003 2004 2005 2006 2007 2008f
Major bulks 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008f
Iron Ore 403 449 451 481 516 588 661 721 787 840
Steaming Coal 300 346 383 406 448 483 507 544 563 587
Coking Coal 162 174 169 171 178 179 184 190 202 211
Wheat/ Coarse Grains 205 214 207 214 206 215 208 225 222 222
Soya Beans 42 50 54 57 59 60 64 67 73 77
Bauxite/ Alumina 54 54 52 55 60 68 78 79 84 89
Phospate Rock 33 30 31 30 29 31 31 30 32 33
Total 1199 1317 1347 1414 1496 1624 1733 1856 1963 2059
% change 9.8% 2.3% 5.0% 5.8% 8.6% 6.7% 7.1% 5.8% 4.9%
Grand Total 1,965 2,109 2,156 2,231 2,359 2,552 2,678 2,847 2,997 3,137
% change 7.3% 2.2% 3.5% 5.7% 8.2% 4.9% 6.3% 5.3% 4.7%
We estimate the highest rate of growth will be in the raw annum as the world’s fastest growing fuel. Meanwhile,
materials cargoes of iron ore and coals at 5.5% year-on- the Energy Information Administration (EIA, part of the
year. Iron ore trade growth should increase by another 50mt US Department of Energy) puts global coal consumption
in 2008 after 65mt in 2007. China’s steel industry is still growth at 48% in the 1980-2004 period rising to 72%
expanding but exports may be hampered by rising export between 2005 and 2030.
tariffs, domestic supply could be reined in by the closure of
smaller mills and domestic demand is expected to roll back South Africa suffered power cuts in early 2008 and power
a bit after the Olympic Games. In spite of this, China should rationing as electricity demand now exceeds generating
still account for over 90% of the growth in 2008 iron ore capacity following inadequate past investment. Power
trades. Overall 5.5% growth in the major trades would still supplies to industry, including to its many base minerals and
be more than one percentage point lower than 2007 and precious metals mines, were cut leading to temporary mine
2.5% below the average 8% rate of growth of the past five closures. Eskom, South Africa’s state utility company, needs
years from 2003 to 2007. This weaker rate of annual growth to find an extra 45mt of thermal coal over the next two
factors in an economic slowdown in the US and Chinese years in order to carry adequate stocks to cope with rising
government efforts to restrain steel exports for fear of domestic power demand. On the face of it, this should
provoking a trade backlash. restrict South African coal exports unless existing collieries
can respond with enhanced production. In 2007, South
The above forecasts underplay the potential for significantly Africa exported nearly 68mt of thermal coal but annualised
larger exports of US coking and thermal coals in 2008. figures for coal throughput at Richards Bay in January
Present figures of an aggregate 40mt could end up as 2008 ran at under 43mt, the lowest since 1999. European
high as 80mt according to estimates of the world’s largest buyers may have to look towards the US and Colombia for
private coal producer, Peabody Energy. The USA may replacement supplies in 2008 and beyond.
have to ramp up its exports, which will test its recently
under-utilised coal export infrastructure, to compensate China, like South Africa, also suffered from brownouts
for increased demand elsewhere amidst falling supplies. in early 2008 after freezing weather shut down mines
Peabody forecasts US exports to rise from 49mt in 2006 to and reduced power generation capacity. Scores of bulk
78mt in 2008 and imports to fall from 36mt to 31mt over carriers from Cosco and China Shipping were diverted
the same period. Net exports are set to increase from 13mt from deepsea trades to shuttle coal along the coast and
in 2006 and 20mt in 2007 to 47mt in 2008. The producer a moratorium was imposed on coal exports until the end
estimates that seaborne coal demand will rise by 7% per of the first quarter. Flooding in Queensland in January
interrupted Australian coal exports at a time of already competition with Japan, South Korea and Taiwan
tight supply. Vietnam, a traditional coal exporter, will cut which sought replacement supplies for their customary
one-third, or about 10mt, of its exports to Japan and Korea Chinese imports. These will probably need to come from
this year in order to satisfy rising power demand at home. Colombia, the USA and Canada. The raw material supply
Russia and Venezuela are also reducing coal exports. All this chain is in turmoil.
is happening at a time of elevated import demand from coal
producers in China, India and Europe. Global coal markets In terms of ship sizes, the panamaxes look well set to
are in a state of flux at present and it is difficult to see how benefit from expected strong growth in steaming coal
the import and export changes will eventually net out. trades that find power utility companies often requiring
smaller ships than can be handled by the steel mills in the
We expect India to increase tonne-mile demand as it coking coal trades. The soya bean, bauxite and alumina
continues to impose export taxes on iron ore in order to trades also offer the prospect of continued meaningful
support its domestic steel-making industry. The largest growth despite gyrating soya bean and aluminium
share of replacement volumes for Far Eastern importers production in Brazil and South Africa because of drought
would most likely come from far-away Brazil as both and other weather related issues. In the handymax and
Australia and South Africa have short-term infrastructure handysize segments steels, cement, agribulks, scrap,
problems that appear even greater than those of Brazil. fertilisers and forestry products are all expected to chip in
China’s early 2008 thermal coal export ban did not stop it with steady year-on-year growth. Overall, the cargoes most
from looking to import extra supplies. Export problems in typical to the handysize segments are forecast to grow by
Australia, Vietnam and South Africa were added to by floods 4.2%, about 0.6% less than the average of the past five
at Indonesian mines reducing choices to various more years from 2003 to 2007.
distant Atlantic-based sources. That put China’s buyers into
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
RoW -1% 5% 3% 2%
bn-tonnes
production Global steel output is set to continue rising led, as ever, by
1.60 China. In 2008, Chinese production is forecast to increase
RoW
1.40 by 11% year-on-year. This impressive gain risks disguising
China
1.20 the fact that the annual rate of increase has been declining
1.00 each year in recent years, albeit from an ever-larger base.
0.80
After 3% growth in the rest of the world in 2007, this is
0.60
expected to drop to just 2% in 2008 – still better than the
mildly negative growth of 2005. Much of the 2008 reversal
0.40
can be laid at the door of weakened house-building in North
0.20
America and Europe and slower economic growth in the
8f
transatlantic economies.
2004 2005 2006 2007 2008f
Other
m-tonnes Global Seaborne Iron Ore Sources
Venezuela
1200
Canada
1000 Mauritania
Russia
800
Chile
Peru
600
Sweden
400 India
S Africa
200
Brazil
0 Australia
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
HSBC’s Metals and Mining team forecast seaborne iron ore overcome its own mining and rail issues in order to
trade developing as per the above graph based upon source increase exports over the coming years while India
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
of production. Australia and Brazil will continue to carve out may struggle to maintain its export volumes should the
the largest share as huge investment in new and expanded government succeed in its stated determination to curb
operations gradually bears fruit. South Africa is expected to exports via export taxes.
2004/2005
2005/2006
2006/2007
2007/2008
The UN’s World Food Program is talking about a “new purchases are a distant memory. Plentiful stocks have
area of hunger” in which the high price of agricultural been used to smoothen demand and leave the grain
commodities, rather than just shortages, is affecting even futures markets largely unruffled. With global stocks now
the urban middle classes. at dangerously low levels, we suspect that large-scale
grains movements will materialise, just as soon as export
The reality of increasing demand from upwards of 2.4 product is available, in order to replenish depleted stocks
million people in China and India alone exposes the illogical to safe levels.
promotion of ethanol before food and cars before people.
The days when shipping markets were moved by the entry
of the Russians or the Chinese to cover wholesale grain
CAGR Absolute
bn-tonne-miles 2002 2003 2004 2005 2006 2007 2008 2009 2004- growth
2009 2004-2009
Iron ore 2,694 2,993 3,440 3,867 4,326 4,680 5,155 5,521 10% 61%
Coal 2,568 2,880 3,442 3,662 3,743 3,856 3,988 4,254 4% 24%
Grain 1,287 1,370 1,396 1,395 1,489 1,524 1,571 1,617 3% 16%
Minor Bulks 4,104 4,489 4,736 4,862 5,046 5,377 5,541 5,780 4% 22%
Total 10,653 11,731 13,013 13,786 14,605 15,436 16,255 17,171 6% 32%
m-dwt
Y/y growth 10.1% 10.9% 5.9% 5.9% 5.7% 5.3% 5.6%
30
Handysize
Handymax
Our colleagues
25 in Equity Research have taken a composite slowdown, but to remain above 5%, with a recovery to
Panamax
view of demand from various sources and have used it to nearer the medium-term trend in 2009. Although we
Post-Panamax
create 20
this forecast of tonne-mile demand growth for the experienced double-digit tonne-mile demand growth in
Capesize
main categories VLBC
of dry bulk cargo. It shows the greatest 2003 and 2004 it has been in the following years of annual
growth15in iron ore cargoes over the five years to 2009 5-6% increases that have seen the greatest response in
but steady growth in the other cargo categories. Year-on- earnings and values.
10
year growth is forecast to dip in 2008 due to the global
5
Earnings
Time Charter
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 15. One year time charter earnings for standard-type bulkers
$ pd
200,000
170k-dwt 1yr TC
175,000 70k-dwt 1yr TC
52k-dwt 1yr TC
150,000
30k-dwt 1yr TC
125,000
100,000
75,000
50,000
25,000
2002-01
2002-04
2002-07
2002-10
2003-01
2003-04
2003-07
2003-10
2004-01
2004-04
2004-07
2004-10
2005-01
2005-04
2005-07
2005-10
2006-01
2006-04
2006-07
2006-10
2007-01
2007-04
2007-07
2007-10
2008-01
just a day later. One week later, Daiichi was reported to Cosbulk paid $25,000 per day for Equinox Voyager (50,832-
have paid $36,000 for Pasha Bulker for a year (before it dwt 2002) for two years in January while Sinotrans paid
grounded off Newcastle in July). $42,500 in August for Ocean Prefect (52,500-dwt, 2003)
also for two years.
By the end of April, Dreyfus was paying $42,500 to take
Ruby Indah (77,755-dwt 1998) for a year. Come the middle Meanwhile, three year rates were flatter still. The peak
of July, the one year rate was up to the high forties: was HMM’s fixture of Innovator (55,435-dwt 2005) in
Transfield paid $49,750 to take Oceanis (75,550-dwt 2001) September for $39,000 which was 62.5% higher than the
for a year with September laycan. By the time Transfield $24,000 that Korea Line paid for Bianco Dan (55,625-dwt
took delivery, it had to pay $66,000 for Yong Huan for a year, 2004) in January. The 3-year market suffered a correction
also with September laycan. in 2008 along with spot rates and shorter period rates. In
late January, Sanko got away with paying a slightly lower
The peak was reached in October when Sinochart fixed $35,350 per day to take Navios Kypros (55,180-dwt 2003).
Yasa Fortune (82,800-dwt 2006) for a year with delivery
in early December for $87,000 daily. By January 2008, Handysize
prevailing rates had eroded significantly as Sealink paid only
The handysize period market remains largely opaque with
$49,000 for the 1995-built Dong Bang (71,747-dwt) for a
few reported deals and even fewer confirmed fixtures.
year. Charterers remained relatively quiet until just before
However, we have enough fixtures to trace out an outline
Chinese New Year when rumours of imminent increases in
of the market in 2007. One-year rates began the year in
the new contract prices of iron ore and coal moved them
the low $20,000s. Pontoklydon (28,450-dwt 1992) was fixed
to take period cover again. Rates duly began to recover lost
in February for one year at $22,000. By August, Odin
ground after a three-month slide.
Pacific (28,381-dwt 1995) achieved $32,000 with Korean
Two year time charter rates also peaked in October when charterers and, at the autumn peak of the market, Korea
Crownland paid $73,500 to take Four Coal (74,020-dwt Line took Eastern Star (28,431-dwt 1997) for one year at
1999) with late November delivery. This was a far cry from $42,000 daily.
February when BHP Billiton had paid only $27,500 for
Also of note were Genco’s twin forays to fix out its
Spartia (75,115-dwt 2000) for two years. The fall from the
handysize bulk carriers for period. The company took
peak was less severe for the longer fixture as the panamax
advantage of firm market conditions to lock in earnings in
beam Bulk Japan (82,800-dwt 2006) fixed to Glory Wealth
March when it fixed five vessels to Lauritzen for two years
for two years in January 2008 at $62,000 daily.
at a reported $19,500 per day. Then in August, Genco fixed
three standard 28,000-dwt units (Genco Charger, Genco
Handymax
Challenger and Genco Champion) to Pacific Basin for three
On a number of occasions in the last few years, modern years at $24,000 a day.
supramaxes have out-earned panamaxes and, from time
to time in 2007, they managed to achieve very similar time Spot Market
charter rates. Our list includes mostly modern ships of
Average weekly earnings are our proxy for spot market
over 50,000-dwt but the strength of the market in the final
performance. Capesize earnings rose steadily throughout
quarter of 2007 is demonstrated by the fact that the biggest
the year, apart from a soft patch in the spring and early
rate reported ($60,000 per day for 11 to 13 months) was
summer period, before peaking in mid November.
for the 43,246-dwt, 1994-built Gulf Globe which Korea
The correction was triggered by a force majeure
Line chartered in the last days of October.
declaration in Brazil after collision damage to a loading
Rates had come a long way since early 2007. Pacific Basin pier at Itaguai/Sepetiba on 12 December that led to
was reported to have fixed Genco Prosperity (47,180-dwt the staggered cancellation of as many as fifty iron ore
1997) for only $26,000 in February 2007 while par for the shipments totalling 8.5 million tonnes. The extent of
year on average was something close to the $37,000 that cancellations and slow timetable for repairs suggests that
Cargill paid for Azzura (52,050-dwt 2004) in April. For longer there may have been some tactical linkage to the 2008/9
period, there was less rate volatility during the year. iron ore contract price negotiations.
Handysize
2002-01
2002-04
2002-07
2002-10
2003-01
2003-04
2003-07
2003-10
2004-01
2004-04
2004-07
2004-10
2005-01
2005-04
2005-07
2005-10
2006-01
2006-04
2006-07
2006-10
2007-01
2007-04
2007-07
2007-10
2008-01
Handymax
Panamax
Post-Panamax
Capesize
Figure 16. Average earnings for standard-type bulk carriers
VLBC
$ per day
180,000 Capesize
160,000 Panamax
Handymax
140,000
Handysize
120,000
100,000
80,000
60,000
m-dwt
40,000 30
Handysize
20,000
Handymax
0 25
Panamax
Jan-05
Mar-05
May-05
Jul-05
Sep-05
Nov-05
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
Post-Panamax
20
Capesize
VLBC
15
This situation was made worse in early 2008 when sentiment in the larger sizes combined with bad news in
Australian iron10ore shippers declared force majeure after global financial markets and falling share prices. Longer-
Cyclone Melanie interrupted Rio Tinto’s mine and rail term period rates were hardly affected as the market still
operations in 5
the Pilbara. This caused rates to fall off the believed the adverse conditions to be of a temporary nature.
proverbial cliff with spot earnings dropping $100,000
per day from a $180,000 daily peak in mid November to Figure 17. Biggest influence on capesize earnings remains
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
an $80,000 daily trough in late January. Rates bounced Chinese steel industry
back strongly in the last week in January when Chinese
Baltic
operators entered the market for period alerting owners to Capesize
hange over theEstimate
possibilityofthat
Drythe
Cargo Demand
correction Growth
had been overdone and Index
revious year that iron ore shipments were about to pick up again. 16,000 R 2 = 0.64
%
14,000
% Meanwhile, the influence of the capesize segment on
12,000
% the earnings of the smaller ships is evident in the above
% 10,000
chart. The shape of the curve representing spot panamax
%
earnings in 2007 not surprisingly bears a close resemblance 8,000
% 6,000
to capesize, although with much lower volatility. At various
%
times during the year when capesize rates rose too far 4,000
%
above panamax rates then shippers would split stems in 2,000
%
%
two and use panamaxes to leverage down capesize rates. 0
1999 Once2001
2000 the rate
2002differential
2003 2004narrows, shippers
2005 2006 2007 tend
2008fto be - 10 20 30 40
quick to switch back to the larger sizes in the interests of Chinese iron ore imports, m-tonnes
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Bulk Carriers
Baltic
Figure 18. Chinese iron ore imports and capesize earnings AnotherCapesize
way to show this relationship is to plot the growth
Indexiron ore imports over time against the Baltic
of Chinese
China Iron Ore Imports, m-t (LHS) Capesize Index. This
16,000 R 2 =time series shows a very strong
Baltic Capesize Index (RHS) relationship
14,000between 1999 and 2004 but thereafter there is
50 16,000
45 increasing volatility in capesize earnings. The coincidence
12,000
14,000
40
12,000 of force majeure events in the world’s two largest iron ore
35 10,000
10,000 export regions in Brazil and Australia, in the November 2007
30 8,000
25 8,000 to January 2008 period, was enough to collapse sentiment
20
6,000
6,000 supporting the old adage that freight rates have the
15 4,000
10
4,000 tendency to go up on escalators and down in elevators.
2,000 2,000
5
- 0 0
- 10 20 30 40
Mar-99
Mar-00
Mar-01
Mar-02
Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 19. Baltic Dry Index, daily ticks. The Baltic Dry Index pools together all the component ship
size indices except for the handysizes. The BDI lost close
2008 to 20% in value between mid November and the end of
12,000 2007
2006 2007 but then further bad shipping and financial news in the
10,000
2005 new year sent the BDI sharply down in January. The index
2004
lost almost 50% of its value from its late 2007 peak before
8,000 staging a recovery. By early March 2008, the 8,000 level
was breached again – it was at this level in 2007 that the
6,000
index went vertical.
4,000
2,000
Values
Figure 20. Relative values and earnings
Date Period – Rate Cape 170K Pmax 73K Hmax 52K Handy 30K
1st Jan 2007 3 years – $/day 47,500 25,000 23,000 16,750
31St Dec 2007 3 years – $/day 105,000 48,000 43,000 26,500
2007 change 110% 92% 87% 58%
31st Jan 2008 3 years – $/day 100,000 45,000 35,500 23,000
2008 to date -5% -6% -17% -13%
Date Age – Value Cape 170K Pmax 73K Hmax 52K (3yo) Handy 30K
1st Jan 2007 5 yr old – $m 81 45.5 42.5 28.5
31St Dec 2007 5 yr old – $m 150 88.5 75 44
2007 change 85% 95% 76% 54%
31st Jan 2008 5 yr old – $m 143.5 83 70 43
2008 to date -4% -6% -7% -2%
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
as they were negatively influenced by the severity of
the falls in spot market earnings. For a few owners this
engendered a sense of panic, leading them to discount their Secondhand capesize bulk carriers enjoyed considerable
pricing in order to conclude deals that still guaranteed them gains in value during the course of 2007. In January,
substantial capital gains. Spring Brave (151,066-dwt NKK 1995) was reported sold
to DryShips for $60m. In March, the slightly larger but
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 21. Newbuilding prices for dry bulk carriers same vintage Martha Verity (157,991-dwt Sasebo 1995)
was said to have fetched $63m to Swiss Marine. In April,
$m
Capesize (170k-dwt)
Formosabulk Allstar (150,393-dwt KHI 1995) was paid in the
100
Panamax (75k-dwt) range of $65-67m and chartered back by Formosa Plastics
90
Handymax (51k-dwt) for ten years on undisclosed terms. By October, DryShips
80 Handysize (23-30k-dwt)
70
was once again linked with a 12-year old vessel Tiger Lily
60 (149,190-dwt CSBC 1995) at $90m, 50% up on what it
50 had paid for a similar-size ship ten months earlier.
40
30 In terms of the more modern ships. In March, Cape Pelican
20 (180,235-dwt Imabari 2005) was reported sold to Diana for
10 $107m and Cape Kassos (170,012-dwt Hyundai Samho
2004) was linked with Alcyon for a comparable $100m.
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
Bulk Carriers
the en bloc sale of Thalassini Niki (170,800-dwt Daewoo Panamax market in 2007
2005) and Thalassini Kyra (164,218-dwt CSBC 2002) was
Figure 23. Benchmark prices for panamax bulkers
reported to Diana at $275m. The former was said to have
a $m
5-year charter attached at $56,000 daily while the latter $m $m
Resale Resale
was
180 charter-free and was in some reports apportioned
5yr-old 120 5yr-old
90
160 80
$133m
140 of the total
10yr-old proceeds. In November, DryShips was 100
10yr-old
70
15yr-old 15yr-old
stated as the20yr-old
120 buyer of Gran Trader (172,529-dwt NKK 2001) 80 20yr-old 60
100 25yr-old 50
at80
$153m, the highest price of the year, and of that freight 60 40
60 price cycle.
and 40 30
40 20
20 20 10
The0 deal of the year was Genco’s nine-cape purchase 0 0
Nov-05
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
Nov-05
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
from Metrostar in July. This involved capesizes ranging
from 170,000-dwt to 180,000-dwt, built or delivering from
the Japanese, Chinese and Korean shipyards of Imabari,
The market for what were 5-year old ships in 2007
Universal, SWS and Sungdong between 2007 and 2009, at
developed nicely during the year. In January, Aeolion Spirit
an en bloc price of about $1.1 billion, an average of about
(76,015-dwt Tsuneishi 2002) was reported sold to Tolani for
$122m each. The four 2007-built vessels had attached
$49.25m. In May, Anangel Galini (74,362-dwt Daewoo 2002)
charters of varying periods and rates. The four 170,000-dwt
was said to have gone to Ocean Freighters for an improved
Sungdongs, delivering October 2008 to September 2009,
$56.5m. Within a few months, in the first half of July, Athina
were purchased by Metrostar from Blystad two months
Zafirakis (74,204-dwt Oshima 2002) sold at tender
earlier for $100m each, allegedly giving Blystad a profit of
for a reported $65.0m to DryShips. Later in the month of
$110m. Clearly Metrostar made an even better annualised
July, Theodoros P (73,870-dwt Namura 2002) was first said
return. To put this in perspective, at the end of February
to have gone to Tolani for $70.5m and then later corrected
2008, a 2010-delivery 170,000-dwt Sungdong resale was
to Daebo at $71.2m. In the space of just seven months,
reported sold for $99m.
5-year old panamax values had gone up about 47%.
We can draw attention to two capesize purchases by keen Around the middle of November, Lietta (76,015-dwt
buyers Rizhou Steel. On 30 October 2007, with the BCI at Tsuneishi 2002) was rumoured sold for a relatively low
14,625 points and a few weeks ahead of its correction, the price of $62.25m when the charter-free value should have
steel mill was reported as the buyer of Sumihou (171,071- around $90.0m. The big discount could be explained by an
dwt IHI 1996) for $106m. More recently, on 6 March attached charter for some 12-24 months at the low rate of
2008, with the BCI at 12,285 points, Rizhao was linked about $25,000 per day.
Figure 24. Benchmark prices for handymax bulkers Figure 25. Benchmark prices for handysize bulkers
$m $m
90 Resale 70 Resale
5yr-old 5yr-old
80 60
10yr-old 10yr-old
70
15yr-old 50 15yr-old
60 20yr-old 20yr-old
50 25yr-old 40 25yr-old
40 30
30
20
20
10 10
0 0
Nov-05
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
Jan-08
Nov-05
Jan-06
Mar-06
May-06
Jul-06
Sep-06
Nov-06
Jan-07
Mar-07
May-07
Jul-07
Sep-07
Nov-07
Jan-08
The 2007 market started where 2006 left off and was
As is evident from the chart, 2007 was characterised by
characterised by an extreme lack of very modern tonnage
steadily increasing values such that, as the year progressed,
(post-2000) coming for sale; no more than a dozen
buyers became fewer and fewer. At each stage, prices
charterfree ships changed hands during the year.
were set by aggressive IPO buyers who tended to bring
Pacific Basin, Clipper and Evalend – amongst the big guns
other buyers in their wake. Liquidity was quite thin with
in the handysize segment – sold systematically during he
few available sales candidates and relatively few buyers but
course of the year. Pacific Basin was eager to charter its
over the course of the year medium-term period rates rose
ships back in order to preserve its fleet size and no doubt
faster than modern secondhand prices. The price of
protect its dividend payments to shareholders. The other
a 5-year old 52,000-dwt handymax peaked at about $75m
two, as private companies, were probably more keen
in mid November.
simply to cash out at historically high values. The abundant
Demand, especially for more modern vessels, was driven availability of period charters, at levels corresponding to
by keen period interest and on occasions it was hard to prices paid, certainly generated considerable momentum
tell whether the tail was wagging the dog or vice-versa. from the end of the first quarter.
The final big push really began in August when charter
strong demand had stripped the market of available sales growth across all segments is forecast to be just under 5%
candidates and values began to accelerate with buyers while average tonnage supply growth across all segments is
being forced to look at vessels encumbered with charters. expected to come in at about 7% on the basis of anticipated
The easy availability of period for older units drove prices up minimal scrapping. However, the gap between supply and
prices in that segment. By mid May, the price of a 10-year demand will be narrowed, or even eliminated, by continuing
old handysize exceeded the newbuilding contract price. congestion at major loading and discharging ports and
Frustrated buyers began to spend more time examining the by increasing tonne-mile growth as trade characteristics
shipyards and soon started bidding up prices to levels that change. The dry bulk market underwent a correction in
finally made sense to the builders to provide forward berths. November that became even more severe in January, but
this correction was based upon cargo supply problems
En bloc deals came into vogue – the Sunwise fleet in June in the larger sizes and adverse sentiment feeding in from
and the Evalend fleet in August – attracting big numbers unstable financial markets. At the time, we expected the
from investors. By August, the BDI shot through the 6,000 dry bulk fundamentals to re-assert themselves and for the
barrier and the handysize market moved up another gear. market to recover and this is indeed what it has been doing
Evalend recorded the first handysize sales at above $40 during February and into early March.
million per unit and, in the 2006-built Stentor, recorded the
highest price ever paid. While supramaxes reached the $80 Closer analysis of the tonnage supply side shows the VLBC
million mark, no handysize has yet breached $50 million. segment growing by 18% from a relatively low base of
This was symptomatic of either a very firm psychological just under 22m-dwt and the conventional cape segment
resistance level or simply of a lack of available very modern expanding at a more subdued net rate of 4.3%, after 5m-
candidates for sale. dwt of new deliveries, from a larger 109m-dwt base. We
expect the VLBCs to be generally covered under long-term
By the third and fourth quarters a rising number of COAs but this still removes existing raw material cargoes
newbuilding contracts were being signed, many at yards and incremental demand growth from the spot market.
with weak financial credentials and poor technical and Nonetheless, the conventional sizes still look to be set fair
commercial prospects. Newbuilding contract prices were for 2008 ahead of a much heavier delivery schedule in 2009
bid up beyond $35-37m with deteriorating payment terms at over 20m-dwt followed by more than 42m-dwt in 2010.
and deliveries stretching into 2012 or even 2013 in Japan. Given the sheer weight of future deliveries, 2008 may be
A sudden jump in values for the fourth quarter – Hanjin a good time for owners with ships on the water to lock in
Houston and sister Hanjin Tampa, both 27,209-dwt built 3-5 years time charter to a top-rated charterer and sit the
1995 – were sold for $40 million. This was a remarkable market out.
development to see 12-year old handysize leap-frogging
forward delivery newbuilding contract prices. There is a parallel development in the expanding post-
panamax segment, which is expected to rise almost
At the older end of the scale, the 23-year old Ypermachos 24% from a low base of under 14m-dwt at the end of
and Diasozousa, both 28,000-dwt built 1984, were sold 2007, whereas the conventional panamax sizes will see
for $26 million each in the fourth quarter. This was twice net growth of less than 5% from a higher base of almost
what they might have achieved at the start of 2007 and 95m-dwt at the end of 2007. The outlook in this segment
50% ahead of what they would have got in only the is positive for 2008 with both 2009 and 2010 set to post
previous quarter. December was a quiet finish to the year an even slower rate of deliveries as the focus moves up
as the freight market adjusted downwards in the middle to the post-panamax sizes. Handymaxes are forecast to
of November. This caused s lull in trading activity while the expand by a net 10% in 2008 while the handysize segment
extent of the correction was evaluated. The last concluded gains less than 4.5% and remains favoured for its flexibility.
handysize in 2007 was Seaglass (28,427-dwt built 1992) The handysize orderbook stands at 26% today compared
$38 million; a 15-year old vessel achieving the same level with 8% at the start of 2007. New yards in China feature
as a newbuilding order. This illustrated the strength of
demand for prompt delivery.
1
Avg. 3-year rates. VLCC up $1,000 daily; suezmax up $500;
aframax up $1,000; panamax flat; MR up $1,000.
The decline in spot market earnings in 2007 was less it was down only 1%. The small handysize, a proxy for
marked than many had expected, helped by a belated and clean traders, was down 4% year-on-year. The late 2007
exceptionally strong rally in the fourth quarter. Average spot rally in crude rates would have been missed by all but a few
earnings for all tankers slipped 9% compared with 2006 and lucky owners but at least it served as a reminder of what is
the Baltic Dirty Tanker Index was down 13% and the Baltic possible, and of how well balanced is supply and demand.
Clean Tanker Index down 12%. Taking the panamax size as The supply side in 2008 has moderated, given conversions
a proxy for dirty products, although this size will increasingly and regulatory tightening post Hebei Spirit, and emerging
move over to clean trading as new LR1 deliveries escalate, market demand remains robust.
Fleet supply
Figure 27. Tanker fleet supply
In GSMR 2007 we separated out the crude oil tankers In 2007, bulk carriers finally took over the limelight at the
from the product tankers. The overlap is most common in shipyards allowing tankers and containerships to pause for
the panamax LR1 and handymax MR sizes but also occurs breath after an earlier period of heavy investment. In the
to a lesser extent in the aframax LR2 segment. In recent process, the bulk carrier orderbook quickly became inflated,
years a higher proportion of tankers in these sizes have although it cut some welcome slack for tankers. At the
been coated as a doubling in newbuilding prices has made close of 2007, the total orderbook of all tankers stood at
the coating option a relatively cheap additional cost for the 41% of the end-2007 fleet with scheduled deliveries spread
extra flexibility that it conveys. Furthermore, modern tank out over four years or more. The workhouse aframax sits
cleaning methods now make it much easier for coated at only 19% of the current fleet by capacity, whereas the
ships to trade dirty products and crude oil cargoes and then larger VLCC and suezmax segments stand at 38% and
return to clean products without much ado. We have thus 42% respectively. Of the 129 panamax tankers of almost
recombined the two categories. 9.5m-dwt on order at the beginning of 2008, 104 or 80%
m-dwt
from the shipyards. Single-hull VLCCs were the main
50 targets for conversion into very large ore carriers (VLOC)
Product tankers
45
Crude oil tankers
deemed suitable for long-haul iron ore imports from Brazil
40
35 to China. A VLCC conversion might typically cost about
30
$25m (plus loss of hire) and take six months to complete.
25
20 The quantum and timing of available capacity at conversion
15 yards is unclear but any project looking at completion
10
5 in 2010 would coincide with newbuild VLOC deliveries,
- begging the question of why any steel mill would provide
pre 1978
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 29. Tanker deletions have been almost suspended Conversion statistics vary, the above figures being courtesy
despite phase out requirements of Clarkson’s Shipping Intelligence Network, a key source
of our supply-side data. The most recent authoritative
m-dwt
30
Products study of VLCC conversions was published by tanker
Handy COT
broker E.A.Gibson on 18 January. For 2007, it put VLCC
Panamax
25
Aframax conversions at 15 units, ten into VLOC and five into FPSO,
20 Suezmax four units more than SIN. For 2008, it forecasts 26 units
VLCC
being converted to VLOC and three units into FPSO.
15
Assuming that these do go ahead then this will have a
10
more positive impact on VLCC supply in 2008, by reducing
5 it, than we have factored into our estimates that follow. As
these tankers are slated for removal from the VLCC fleet
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 in 2008 then we can safely assume that the owners have
booked the conversion yard, probably fixed subsequent 25th anniversary, whichever comes first. The most modern
employment and are beyond the point of no return when it extant single-hull VLCCs are two that delivered in 1996 and
comes to possible second thoughts. they will hit the beaches by the end of 2015, at the latest,
at the relatively young age of 19 should another purpose
Conversions beyond 2008, which Gibson’s projects as 19 not be found for them. The trend of converting is set to
in 2009 (14 to VLOC and 5 to FPSO) and 10 in 2010 (5 each continue, further depriving the scrap dealers of Bangladesh,
to VLOC and FPSO), may be more vulnerable to change Pakistan and India of their natural feedstock despite
if conversion yard space and or future employment are Bangladesh bidding in excess of $600 per lightweight ton
not yet booked. Then there is the wobble factor. In the for tanker demolition candidates.
three month period between November 2007 and January
2008 the spot capesize market collapsed while the VLCC There is now the prospect of a VLCC being sold for scrap
spot market soared, a dramatic enough seesaw motion within Q1 2008. The single-hull B Elephant (239,351-dwt
to make conversion owners seriously think twice. The Sasebo 1986) is said to have received bids of $630 per ldt
fact remains that the weight of conversions from single- against its owner holding out for a record $700 per ldt. In
hull VLCCs, together conversions from tankers in all the February 2008, five double-sided aframaxes were reported
other size segments, is dramatically improving the tanker sold to Chinese conversion buyers. Frontline sold Sea
market outlook over the next five years. Conversely, it is Leopard (94,993-dwt Koyo 1990) and Sea Panther (97,112-
m-dwt
30 deteriorating the dry bulk outlook over the same period for dwt Imabari 1990) for $40m en bloc while Phoenix sold
Handysize
large bulk carriers, especially in the context of new bespoke Seletar Spirit (98,288-dwt Koyo 1988) for $17.5m, Sentosa
Handymax
25 VLOC and cape deliveries beyond 2009. Spirit (97,161-dwt Imabari 1989) for $19.5m and Seraya
Panamax
Post-Panamax
Spirit (97,019-dwt Imabari 1992) for $23.5m. At the big
20 To summarise, this report envisages 55 out of the fleet end of the business, OSG and Euronav are converting their
Capesize
of 1502 single-hull VLCCs to be removed from oil tanker Daewoo 2002-built 442,500-dwt TI Africa and TI Asia to
VLBC
15 service and converted into bulk carriers in the 2007-2010 FSOs under an 8-year storage contract to Maersk Oil Qatar
period while a further 18 will make it into FPSOs during the running from Q3 2009. That takes two of four of the largest
10 same period. That leaves 77 for further conversion work or tankers in the world out of active service.
demolition between now and the end of 2015 (if they elect
5 for the Condition Assessment Scheme from 2010) or their
2
SIN in mid-Feb 2008 puts the VLCC fleet at 498 units: 358 DH,
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
134 SH, 5 DS, 1 DB i.e. 140 non double-hull.
$pd
250,000
Cape
200,000 VLCC
150,000
100,000
50,000
0
2/11/07
9/11/07
16/11/07
23/11/07
30/11/07
7/12/07
14/12/07
21/12/07
28/12/07
4/1/08
11/1/08
18/1/08
25/1/08
1/2/08
8/2/08
15/2/08
22/2/08
29/2/08
7/3/08
Handysize
Handymax
Panamax
The process of converting away from single-hull VLCCs single hulls trading in their waters from 2015 to 2010.
into very
Post-Panamax large ore carriers gained in popularity as 2007 Korea is the largest user of single-hull VLCCs and this
progressed.
Capesize Two issues would have made conversion accident is another nail in the coffin of these tankers as
VLBC owners pause for thought: the Hebei Spirit oil spill off inspection regimes worldwide will become even more
South Korea on 7 December and the inverted performance intensive. The rate premium for doubles over singles has
of large tankers and bulkers towards the end of the year. widened materially and all of a sudden future supply-side
The oil spill from the single-hull VLCC was one-third the size factors are arguably favouring big tankers over big bulkers.
of the Exxon Valdez in 1989 but more than enough for the
Korean authorities to bring forward the guillotine date for
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 31. Recent oil tanker contracting
m-dwt
Handy types to feed at the trough, before they get pushed aside as
30
Panamax the hunger of the former supplicant returns. As an example
25 Aframax
of this feast and famine tendency, VLCC contracting in Q1
Suezmax
20 2006 was extremely vigorous following many consecutive
VLCC
15 quarters of abstinence. The feasting binge endured all
10
of 2006, albeit at a slower rate of consumption. The
subsequent slimming program in 2007 was assisted by the
5
exercise of shedding pounds to the large bulk carrier and
0
FPSO segments. But, as we all know, these things never
2003-Q2
2003-Q4
2004-Q2
2004-Q4
2005-Q2
2005-Q4
2006-Q2
2006-Q4
2007-Q2
2007-Q4
Vessel contracting is a dynamic exercise. Over the past In looking at fleet developments in each segment in
five years of generally strong, but always volatile, shipping the following tables we have, as in the past, taken the
markets we have seen any under-ordered segment gain five-year average of deletions to come up with our
contracting attention until appetite is more than satiated. A deletions estimate.
period of relative famine ensues, allowing other sizes and
In last year’s GSMR we had forecast net VLCC fleet growth converted in 2008, as per earlier estimates, then at 270,000-
of 3.7%; it turned out at 4.4% because our deletions dwt average unit size over 7m-dwt will exit the sector
estimate of 4.4m-dwt was marginally on the high side. For during a year in which 2.2m-dwt already left in January.
2008, we are conservatively expecting a 4.8% capacity gain That would reduce net VLCC fleet growth to just 2.9% in
in the segment to 155.5m-dwt in total. This is not far out of 2008 and this figure gives us confidence that the big ships
line with previous years of 4.3% growth in 2006 and 4.4% will continue to prosper this year on the back of resilient oil
in 2007. However, if 26 single-hull VLCCs do indeed get demand in emerging markets, led by China and India.
We had predicted 5.7% net growth in the suezmax fleet running at just over 4m-dwt per year for the last four years
for 2007 but it came in quite a lot lower at only 4.3%. prior to which deliveries averaged 3.3m-dwt per year during
This is because removals almost tripled over the previous the previous four year period since the end of 1999.
year to eleven units of nearly 1.6m-dwt. Even with what Thus 2008 represents an historically low delivery year and
seems to be a low exit forecast for 2008, we still expect the this should provide some cushion against any possible
suezmax segment to expand by only 3% this year to 56.3m- demand weakness. But beware, as in 2009 deliveries
dwt. This will be more than 3% lower than the average are scheduled to triple to over 9m-dwt which will prove
of the previous three years. Annual deliveries have been testing without a very upbeat demand-side response.
Our prediction of aframax fleet growth for 2007 was years between 2003 and 2007, there were 38.5m-dwt of
4.8% but it came in much higher at 6.6% after a pace of aframax deliveries and 26.2m-dwt of removals, making this
demolition and conversions that was broadly in line with a dynamic and modernising segment. Scheduled deliveries
2006 and 2005 (in the range of 1.8 to 1.9m-dwt per year). of 7.7m-dwt in 2008 are coincidentally the same as the
But these figures were well behind the previous cyclical 7.7m-dwt annual average deliveries of the last five years.
peak demolition years of 2004 (2.7m-dwt) and 2003 (4.0m- Our removal estimate of 2.4m-dwt lends itself to 6.9% net
dwt). This skewed our demolition forecasts for 2007 higher, fleet growth in this segment this year, slightly above 2007.
being the average of the preceding five years. In the five
A year ago we predicted net fleet growth in the panamax and dirty products fleet in this segment is in sharp decline
tanker segment of 1.6% but it came in much higher at whereas the orderbook is 80% inclined towards LR1 clean
7.5%. In 2007 we had allowed for 1.0m-dwt of removals, product tankers. In 2008, only 2.8m-dwt of deliveries are
being the average removal rate of the previous 5 years, scheduled in this size of tanker and, after adjustments for
and it turned out at about half that at a bit over 0.5m-dwt. forecast removals, we expect net fleet growth of 1.8m-dwt
Last year, four units were scrapped and four removed, or 7.5% year-on-year. This will be well below the double-
which usually means converted to other use. The crude oil digit annual expansion of recent years.
Our handysize tanker fleet excludes more specialist types rise to 33.7m-dwt based upon anticipated heavy scrapping
such as the IMO I/II chemical/oil carriers, bunkering ships, of 3.8m-dwt in the small products segment, fairly evenly
edible oil carriers and combination carriers. This would spread between clean and dirty. In the end, scrapping was
add at least a nominal 50m-dwt to the fleet although not less pronounced. For 2008, deliveries should be about
all of that would be regularly (if at all) available for crude double scrapping levels, so net fleet growth of about 5.6%
oil or oil products trading. Within our narrower definition, will be in the range of the last two years.
our forecast for 2007 net fleet growth had been a 2.4%
In summary, the total tanker fleet grew by a net 17.3m-dwt, net fleet growth of 17.8m-dwt to 354.9m-dwt. At 5.3%,
or 5.4% year-on-year, in 2007. Based upon 28.9m-dwt of tanker fleet growth this year will be broadly in line with the
deliveries and 11.2m-dwt of removals in 2008, we forecast last three years.
The VLCC fleet was 72% double hull at the end of 2007 seeing that the rationale for conversion to VLOC is being
compared with 69% at the end of 2006 and the single undermined, first, by lack of both conversion yard space and
hull fleet has reduced to 26% from 30% a year ago. bank finance and, second, from the threat of over-tonnaging
The single hull fleet will continue to shrink as VLCCs are as bespoke newbuilding deliveries ramp up in 2009 and
withdrawn from service and converted to other use and peak in 2010.
as charterers increasingly shun them. The Hebei Spirit oil
spill in December 2007 has the potential to cause a domino It surprises us that some steel mills are willing to commit
effect in Asia that leads other crude importers to tighten long-term Brazil/China COAs to these untested conversions
their rules. The widening rate discount and increased when questions are being asked about their structural
waiting time for single hulls are exerting downward suitability for the iron ore trade. It might be better to wait
pressure on returns. These factors are accelerating the rate a while and exploit a looming excess of built-for-purpose
at which these tankers are being lined up for conversion newbuildings delivering in 2010 to nail down long-term
to bulk carriers, FPSOs and heavy lifters. We are already contracts at potentially lower rates on ships that are
designed for the trade. Taking newbuilds of 300,000-dwt Jin Hui 300,000-dwt orders at Dalian have recently been
or above alone, there are 8 scheduled to deliver in 2009, cancelled as the company was unable to get debt finance
13 in 2010, 16 in 2011 and 6 in 2012. These deliver in the on attractive terms despite having 15-year employment
midst of a sea of conventional capes and other vessels for each from a first-class Chinese steel mill. A sign of
between 170,000-dwt and 300,000-dwt. Out of these, two the times.
Oil Demand
Figure 39. Different views of oil demand (all in m-bpd)
Total Demand 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
IEA 77.30 77.67 79.20 82.27 83.90 84.80 85.95 87.62 90.00 91.90
OPEC 75.86 76.55 79.49 81.99 83.30 84.58 85.76 86.97
EIA 77.41 78.04 79.62 82.33 83.66 84.77 85.72 87.04 88.30 90.70
HSBC 82.33 83.68 84.78 85.78 87.68 89.16
Demand Growth
IEA-OMR 0.37 1.53 3.07 1.63 0.90 1.15 1.67 2.38 1.90
OPEC 0.69 2.94 2.50 1.31 1.28 1.18 1.21
EIA 0.64 1.57 2.71 1.33 1.11 0.95 1.32 1.26 2.40
HSBC 82.33 1.35 1.10 1.00 1.90 1.48
We continue to struggle with our three main sources of oil as a result of falling house prices within the transatlantic
demand forecasts: the International Energy Agency (IEA) economies. The revision might have been more severe
representing the OECD nations; the Energy Information but for the fact that 45% of projected oil demand growth
Administration (EIA) of the US Department of Energy; and in 2008 is forecast by the IEA to come from oil-importing
OPEC (the Organisation of Petroleum Exporting Countries). Asia, and a further 12.5% from Europe. This demand is
They never agree with one another and possibly their not considered to be at risk of derailment from a decline in
forecasts are more in tune with their own agendas as either performance from America.
producer or consumer. The IEA and EIA tend to talk up
demand in order to encourage OPEC to increase supply In its 13 February Oil Market Report, the IEA highlights
and thus bring prices down, while OPEC tends to talk down various topical features of today’s energy markets, all of
demand in order to justify restricting supply and thus keep them being familiar themes. Prices are volatile and still
prices high. The IEA predicted 1.80m-bpd demand growth trading above $90 per barrel for WTI. Weaker projections
in 2006, it turned out at 0.90m-bpd or 1.1% year-on-year for global economic growth are offset by low stocks (lower
growth. In 2007, the IEA forecast 1.55m-bpd growth but than the average of the last five years), forecast cold
it turned out at 1.15m-bpd or about 1.4%. These are large weather in the US North East and parts of Asia and supply
margins of error. disruptions in Nigeria, Venezuela and the North Sea. January
world oil supply rose by nearly 750,000-bpd to 87.2m-bpd
On 16 January, the IEA had forecast 2008 global oil demand thanks to increased output from Brazil and other non-OPEC
growth of 1.98m-bpd or 2.3% year-on-year, almost double sources. Non-OPEC producers are expected to increase
its pre-revision growth forecast of 1.05m-bpd for 2007. output by almost 1.0m-bpd in 2008 on rising supply from
Naturally this raises our expectations of a meaningful the FSU, Asia-Pacific and Brazil (part of which is made up
increase in seaborne oil trade. But, come 13 February, the of increased biofuels production). The EIA has lowered its
IEA reduced its forecast by 200,000-bpd to 1.67m-bpd forecast of 2008 demand growth 0.2m to 1.4m-bpd with
bringing total estimated global consumption in 2008 down OPEC predicting a 1.2m-bpd, or 1.4%, rise. The top to
from 87.8m-bpd to 87.6m-bpd. The reasons lie in global bottom range of our forecasters is 1.7 to 1.2, very much a
economic weakness, led by the US, time-lagged demand case of take your pick.
destruction caused by high oil prices and lower spending
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
premium for storage. has been rising at just over 2.5-times the rate of global oil
demand growth. The current average oil demand growth
Early data from the US, Japan, EU-15 and Norway suggests forecast for 2008 of 1.8% should translate into just under
a stock build in January of just over 22m barrels illustrating 5% total seaborne oil demand growth. That is close to
the effect of increased seaborne oil imports in response matching our forecast of 5.3% net tanker fleet expansion in
to stock drawdowns and a narrowing in the backwardated 2008. Systemic inefficiencies should further narrow the gap.
futures spreads that finally prompted buying activity. Oil demand figures are at risk of being revised downwards
The upward leg in the spike in VLCC rates in December should the US economy sink into recession but, today, the
may be put down to the delayed impact of the 0.5m-bpd consensus is that oil demand will grow by 1.5m-bpd in 2008
plus OPEC output increase from 1st November. after only 1.0m-bpd in 2007, while the total tanker fleet is
The downward leg can be attributed to constrained forecast to expand by 5.3% in 2008 after 5.4% in 2007.
supplies, negative sentiment and positional factors. Based on those statistics, 2008 should trump 2007.
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
7 - Jan - 07
28 - Jan - 07
18 - Feb -07
11 - Mar - 07
1 - Apr - 07
22 Apr - 07
13 - May -07
3 Jun - 07
24 - Jun - 07
15 - Jul - 07
5 - Aug - 07
26 -Aug - 07
16 -Sep-07
7 - Oct - 07
28 - Oct - 07
18 - Nov - 07
9 - Dec -07
30 - Dec - 07
20 - Jan - 07
10
Tankers
Figure 540 plots VLCC earnings against the 3-month spread As the spot price of WTI became more expensive than
in WTI futures prices. The price spreads were quite a lot future prices, all incentive to import crude evaporated,
wider based upon the broader 6-month term structure as there was no payment for storage and it became a
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
but the above still illustrates a point. WTI futures were in loss-making trade. Also, high imported crude prices were
contango up until the end of July meaning that forward damaging refining margins. Backwardated prices saw
prices were higher than spot prices. This encourages oil refiners draw down their stocks which, between August
2005-01
2005-09
2006-05
2007-01
2007-09
imports as higher future prices pay the cost of storage and November, dipped well below the 5-year average.
and provide a positive ‘carry’ and was supportive of VLCC As OPEC raised official production quotas by 0.5m-bpd
earnings in the first six months of 2007. The narrowing of from November 1st, the WTI spread began moving back
the spread, and its final move into backwardation in late towards par. This was the trigger for US refiners to seize
July, was disastrous for VLCC rates pushing average weekly the opportunity to replenish depleted stocks and it was
earnings down below $20,000 daily in mid September, done with sufficient gusto to boost VLCC spot rates up to
incurring steep losses to a few unlucky owners. $240,000 time charter equivalent on AG/far East, bringing
back memories of November 2004 .
Figure 41. MEG crude exports – still behind the September 2005 peak of 23.63m-bpd
E.Med Exports
Red Sea Exports
m-bpd Refined Product Exports
AG Crude Exports
25
20
15
10
0
1998-01
1998-05
1998-09
1999-01
1999-05
1999-09
2000-01
2000-05
2000-09
2001-01
2001-05
2001-09
2002-01
2002-05
2002-09
2003-01
2003-05
2003-09
2004-01
2004-05
2004-09
2005-01
2005-05
2005-09
2006-01
2006-05
2006-09
2007-01
2007-05
2007-09
2008-01
The Middle East remains the export market that exercises On average, non-compliance reduced actual production
the most influence over the fortunes of the VLCCs. At the cuts to only about 1.1m-bpd but almost all of this was from
end of 2006 OPEC officially cut 1.2m-bpd of production, the AG. These production cuts kept a lid on VLCC rates in
followed by a further 0.5m-bpd in early 2007, in anticipation the first half, although they remained respectable in the
of slowing demand from the US that threatened to light of what was to come in the third quarter when the
destabilise oil prices. OPEC considered that the market WTI futures moved from contango to backwardation. The
was well supplied, OECD stocks had been rebuilt, long decision to increase supplies by an official 0.5m-bpd from
futures positions were artificially supporting prices and 1st November had positive repercussions on AG supply,
geopolitical risks were beyond the organisation’s control. sentiment and VLCC rates.
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
Figure 42. Global Refining Capacity (k-bpd)
North America L America Europe & Eurasia ME Africa China India Other Asia Pacific
100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
(Source is a composite of IEA, BP and HSBC Oil and Gas Division Estimates.)
There is good news for Asian oil products throughput this or 76%, from the current 2.1m-bpd maximum output with
year. A Reuters survey suggests that Asia-Pacific oil four new refineries. However, the fast pace of domestic
refiners will shut only 2.7% of refining capacity in the demand growth may keep all or most of the added output
second quarter for maintenance, roughly half the within the Kingdom rather than available to export markets.
capacity shutdowns of a year earlier. An average of about Abu Dhabi National Oil Corporation (ADNOC) plans to more
680,000-bpd of throughput will be shut for maintenance than double the current 400,000-bpd capacity of its largest
during the period. This is 470,000-bpd less than in crude refinery at Ruwais. The engineering and design study
Q2 2006 when refiners shut down 4.7% of their total for the plan is expected to be completed by the end of 2008
capacity to upgrade for tighter environmental regulations. or in early 2009. Kuwait plans to boost the crude processing
The lighter maintenance season coincides with modest capacity of its Mina Abdullah refinery by 104,000-bpd by
shutdowns in Europe and the US, meaning that there will June 2012. IEA forecasts of oil demand growth in 2008
be extra seaborne crude movements in Q1 and higher put the Middle East second only to Asia at 393,000-bpd
fuel availability during the second quarter when demand compared with 748,000-bpd respectively. Therefore, at
traditionally slackens. At this time, heating oil requirements this stage, it is hard to assess how much product will
in the northern hemisphere reduce as spring arrives and become available for seaborne export.
gasoline demand remains subdued ahead of the summer
driving season. OPEC is nervous that slower demand may Indian Refinery Expansion – the Holy Grail for
lead to lower prices and that is why it held quotas steady product tankers?
at its March 5th meeting in Vienna. The US had argued for India’s refineries have an estimated current throughput
an increase in supply to bring prices back to well below capacity of 2.98m-bpd, or about 155.4m-tpa, according
$100 to a point where they may help rekindle flagging to latest figures from Reuters and ONGC. Once existing
global demand. refineries are expanded and new planned ones built, this
should increase by 2.14m-bpd or 72% to 5.12m-bpd or
Middle East Refinery Expansion – new product required 270m-tpa by 2012 (using an average conversion factor
in home markets? of 7 barrels to every tonne). India has the advantage of
Saudi Aramco’s new 400,000-bpd $8bn Ras Tanura refinery being close to crude oil supply in the Arabian Gulf, is Asia’s
is scheduled for completion in December 2012, some nine third largest oil consumer and has ambitions to become a
months later than original schedule. Saudi Arabia plans to regional refining centre. Central to these plans are meeting
raise its domestic crude refining capacity by up to 1.6m-bpd, Euro and US fuel standards in order to export the requisite
gasoline grades direct to distributors in developed markets The other private operator is Essar. It has a single refining
in Europe, the US and South East Asia. As a rule of thumb, complex at Vadinar, which opened in November 2006,
state-owned refiners are bound to service domestic before that has a 10.5m-tpa throughput capacity which is being
export demand, thus selling products into the Indian market expanded to 34m-tpa within 2010. It currently produces
at capped prices and receiving partial compensation from Euro II and III products but specifications will be raised up
the central government via oil bonds. Privately-owned to Euro V and US standards within the $6bn expansion
refiners, such as Reliance and Essar, are almost entirely program to meet the requirements of customers in Europe,
export-focused so as to maximise returns. the US and Asia, as well as domestic consumers. The
focus is clearly on exports as economics dictate that if
Indian Oil Corporation’s ten refineries have a combined you buy and import crude at market prices then you must
processing capability of 1.2m-bpd, or over 60m-tpa, also sell refined products at market prices, not at domestic
according to IOC’s own figures, and have about 40% of the capped prices. India is not alone in capping energy prices.
total Indian market. Its $11.2bn expansion plans are well The policy, in some shape or form, is rife throughout the
underway and it expects to add a new 15m-tpa refinery at Middle East, China, other Asia and the Americas. Europe
Paradip by end 2011. Another state-owned refiner, Bharat seems to be virtually alone in setting market prices and
Petroleum, has three refineries at Mumbai (12m-tpa), taxes represent about 70% of a gallon of petrol in the
Kochi (7.5m-tpa) and Numaligarh (3m-tpa). Current UK. America effectively subsidises motorists by failing to
throughput is about 480,000-bpd expected to rise by raise taxes from low levels, as a way of promoting fuel
40,000-bpd as Kochi’s capacity is stretched. Some conservation, and by subsidising the production of ethanol
$4.2bn is earmarked for two new refineries at Bina as a fuel additive.
(6m-tpa) and Allahabad (7m-tpa) with the former scheduled
for completion by December 2009 and the latter on hold In early March 2008, Indian refiners are re-assessing their
until Bina is completed. Hindustan Petroleum, also state- new projects in the light of the Union Budget. Currently,
owned, owns two refineries in Mumbai (7.4m-tpa) and new refineries are eligle for 100% income tax exemption
Visakh (9.2m-tpa) plus a joint venture at Mangalore. It has for the first seven years of operation. Under the new
allocated the equivalent of $1.15bn for upgrading plans budget, tax holidays for the refining of ‘mineral oil’ are
and is proposing a new 9m-tpa refinery at Bhatinda in joint revoked for new and expanded projects commissioned
venture with LN Mittal for completion within 2010. after April 2009. This will affect the economic viability of
any facility being built outside a special economic zone.
The Oil and Natural Gas Corporation (ONGC) has a The future of these massive new refinery projects
9.7m-tpa refinery at Mangalore which is running at 129% now comes down to a matter of definition. In Monty
of nameplate capacity with a 2007 throughput of 12.5mt. Pythonesque style, the report seeks to clarify that “for
This will be expanded to 15m-tpa by 2010 with about $2bn the purposes of this section, the term ‘mineral oil’ does not
in funds allegedly allocated for the purpose. On the to do include petroleum and natural gas, unlike in other sections
list is a planned 15m-tpa new refinery at Kakinada. On the of the Act.” Shipowners who have contributed to the
private side, Reliance commissioned a 660,000-bpd facility build-up of the huge product tanker orderbook will no doubt
at Jamnagar in 1999 which is running at above nameplate await with interest any further linguistic developments that
capacity at about 34m-tpa annual throughput. It will be may influence the future availability of long-haul cargoes
joined by an adjacent facility by the end of this year with between India and Atlantic-based consumers.
a targeted capacity of 580,000-bpd. The total cost of both
facilities is estimated to be $12bn, the 1.25m-bpd combined Historic and Projected Seaborne Oil Trade
throughput (at the upper end of a 60m-tpa to 65m-tpa
We have taken some figures courtesy of Clarksons.
range) will catapult Reliance to the top of the national
Seaborne crude trade grew by 3.6% on a compound
leaderboard. Furthermore, the site, which occupies an
annual growth basis (CAGR) between 1990 and 1999 and
area the size of London, will be the largest single-site
then from 2000 to 2006 it slowed to 2.6%. Meanwhile,
refinery in the world. The government has designated
seaborne products trade rose at a CAGR of 1.5% from
100% of output as export-orientated and it is this point
1990 to 1999 compared with a faster rate of 5.5% in the
that should tickle shipowners.
period from 2000 to 2006. There may be a certain logic
in the juxtaposition of seaborne crude trade falling just as
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Earnings
Time charter
Figure 43. One-year time charter earnings for nominal standard tankers
$pd
80,000
70,000
60,000
50,000
40,000
30,000
20,000
2008 - 06
2005 - 08
2005 - 10
2005 - 12
2006 - 02
2006 - 04
2006 - 06
2006 - 08
2006 - 08
2006 - 10
2006 - 12
2007 - 02
2007 - 04
2007 - 06
2007 - 08
2007 - 10
2007 - 12
2008 - 02
VLCC
Suezmax
Aframax
Panamax
Handysize
One-year rates have remained reasonably stable in the Aframax one-year rates were also range-bound, with
aframax and smaller sizes over the past few years. modern vessels fixing between $30,000 and $35,000
Greater volatility exists in the larger VLCC and suezmax per day throughout 2007. Phoenix set the tone for
segments as they are influenced by sharper movements modern tonnage in February with the fixture of Arafura
in the spot market. Sea (105,856-dwt 2000) for $33,000 daily. In May, Stena
Bulk took the ice-class 1B Nevskiy Prospect (114,597-dwt
For VLCCs, the one-year time charter benchmark was 2003) for a year at $35,000 daily and the conventional Rich
established at the start of the year by Koch taking Desh Queen (105,200-dwt 2007) at the lower rate of $31,750
Vaibhav (316,000-dwt 2005) for $50,000 per day. By June, per day. By the year’s end Shell was fixing Mare Adriacum
Koch was still only paying $49,500 per day for one year’s (110,500-dwt 2004) at only $31,000 daily. A few three-year
charter of a VLCC, but this time it was the rather older deals as typified by AET’s January fixture of Glenross
Shinyo Navigator (300,509-dwt 1996). Koch had an option (90,679-dwt 1993) and Loch Ness (90,607-dwt 1994) at
to take the ship for a further year at $51,000. At year’s $26,000 daily. By the end of the year ExxonMobil was able
end, BP paid $52,500 for a 12 to 15 month charter of Smiti to take Pink Sands (98,891-dwt 1993) for three years at the
(281,000-dwt 2005) but the upward pressure on time lower rate of $27,450. Par for the year for more modern
charter rates from the spot market surge of 4Q07 finally units was probably near to the $27,900 that Chevron
came to light in some fixtures reported in January and Texaco paid in June for a 3-year commitment on
February. First the 299,700-dwt, 1995-built La Paz was fixed Ambelos (105,400-dwt 2006).
for a year by TMT for $65,000 per day from SK Shipping,
who had themselves taken the ship for three years in
m-dwt Further down the size scale the one-year rate band
30
May 2007 for $45,000 daily. Finally, in February 2008, two
Handysize narrowed even further. The average one-year rate paid
modern VLCC’s, Crude Progress (300,000-dwt 2002) and
Handymax for a panamax tanker in 2007 was around $29,000 per
25
Spyros (319,000-dwtPanamax
2007), were reported fixed for one day. In May, PDVSA paid $30,500 to take Omega Queen
year each at
20
$70,000Post-Panamax
daily. (74,999-dwt 2004) while in October Teekay paid $27,500
Capesize
to take the smaller deadweight Fedor (70,000-dwt, 2003).
Longer period fixtureVLBC
rates for VLCCs fizzed along the Modern MR tankers were not too far behind in what were
15
same long-burning fuse before exploding in the final more frequently reported fixtures. In February, Cargill was
quarter. In January 2007, STX PanOcean took Eagle reported to have fixed the newbuilding FR8 Spirit (51,000-
10
Vermont (306,400-dwt 2002) for three years at $45,000 dwt 2007) at $25,000 daily and, in March, Mercuria paid the
daily, the same
5
rate paid for La Paz by SK Shipping four same rate for Targale (51,800-dwt, 2007). In June, Navig8
months later. In November, CSSSA sneaked ahead of the succumbed to a firmer $26,000 for Ugale (51,800-dwt,
market rise and paid only $45,000 for three years for the 2007) and, in December, Vitol negotiated a softer $24,500
2001-vintage Utah (299,498-dwt). But the next month,
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
daily for a third Latvian Shipping sistership Piltene
TMT had to pay a much higher $52,500 for three years (51,800-dwt 2007).
on Neptune (319,360-dwt 2002) and in January 2008
Wah Kwong paid $47,500 for four years on Venture Voyage Charter
Spirit (298,287-dwt 2003).
Figure 44. Average Baltic tanker indices 2002-2008
Suezmax one-year time charter rates were stuck in the
index
range of $40,000 to $50,000 per day for modern 150,000-
2,250
dwt double-hull units. In early 2007, Teekay was reported BCTI
2,000 BDTI
to have paid $42,500 for Hellespont Trooper (147,916-dwt
1,750
1996) and Mercuria paid a significantly lower $36,000 daily
for the older Tromso Trust (154,970-dwt 1991). One-year 1,500
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
much more pronounced in the dirty tanker index. Each point
$pd
250,000 VLCC
Suezmax
Aframax
200,000
Panamax
Products
150,000
100,000
50,000
Jan - 05
Feb - 05
Mar - 05
Apr - 05
May - 05
Jun - 05
Jul - 05
Aug - 05
Sep - 05
Oct - 05
Nov - 05
Dec - 05
Jan - 06
Feb - 06
Mar - 06
Apr - 06
May - 06
Jun - 06
Jul - 06
Aug - 06
Sep - 06
Oct - 06
Nov - 06
Dec - 06
Jan - 07
Feb - 07
Mar - 07
Apr - 07
May - 07
Jun - 07
Jul - 07
Aug - 07
Sep - 07
Oct - 07
Nov - 07
Dec - 07
Jan - 08
Feb - 08
But for the spike in VLCC spot market earnings in the fourth Aframax rates followed a similar pattern in 2007 and spot
quarter, 2007 would have been a poor year and very much earnings ended the year some 9% down on 2006. We
worse than 2006. Average spot earnings for the whole year forecast net fleet growth of only 2.2% in 2008 after 6.6%
ended up only 9% down on 2006 although very few owners in 2007. On the basis of such restrained supply growth, and
would actually have benefited from this brief but sharp robust demand, we anticipate that earnings will improve for
uptick which would have required fortuitous timing and the aframax segment this year.
positioning. Even though oil demand forecasts may decline
as the year progresses, positive supply-side factors suggest Panamax spot rates in 2007 were only 1% down on the
that 2008 should be better than 2007. previous year. Net fleet expansion should come in at
about 7.5% in 2008 after 10.7% in 2007. This segment
Suezmax spot rates largely tracked the larger VLCC is positioning itself to capture rising volumes in the clean
segment but for a dramatic spike in earnings at the end product trades from the Middle East and Asia to the US and
of March caused by a strike at the French Mediterranean Europe.
oil port of Lavera which delayed ships from discharging.
Suezmax spot earnings were down 16% year-on-year. We Small clean products tankers were insulated from earnings
forecast net fleet growth of 3.0% in 2008 after 4.3% in weakness in 2007 with average rates declining by only 4%
2007 which gives some scope for optimism. compared with 2006. In the broader 10,000 to 60,000-dwt
product carrier segment we expect net fleet growth of only
1.8% in 2008 after 5.4% in 2007. Rising inter- and intra-
regional trades in 2008 should underpin earnings this year.
10
US$m 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
VLCC 72.5 69.0 76.5 70.0 63.5 77.0 110.0 120.0 129.0 146.0
5
Suezmax 44.0 42.5 52.5 46.5 43.8 51.5 71.0 71.0 80.5 91.0
Aframax 34.5 33.0 41.5 36.0 34.8 41.5 59.0 58.5 65.5 72.5
Panamax 31.0 31.0 36.0 32.0 31.2 37.5 48.0 50.0 58.5 63.5
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
m-dwt
30
Products 26.0 26.0 29.5 26.3 27.0
Handysize 31.5 40.0 43.0 47.0 52.5
Handymax
$m 25
Panamax
for bulk carriers, ultra-large boxships and specialised ships
150 VLCC
Post-Panamax VLCC
Suezmax
20 that reduced future berth availability for tankers. It was
125 Aframax Capesize
also in some part attributable to the fact that owners have
Panamax VLBC Suezmax
100 Products
15 strong balance sheets and have been happy to continue
40k-dwt
reinvesting surplus cash in shipping which has provided
Aframax
75
10 stellar returns. There is something distinctly comforting in
50
investing in a real asset with a 25-year useful economic
Panamax
1999
2000
2001
2002
2003
2004
2005
2006
2007
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
has a utility value. Should it turn out that ordering has been
overdone, causing earnings and values to decline, then
Newbuilding prices for all tankers rose during 2007 with patience becomes a virtue as one is forced to wait for the
$m largest gains at the top end. VLCC prices were up
the next up-cycle in the life of the asset. Shipowners are used
150
13.2%
$m year-on-year, suezmax up 13.0%, aframax VLCC
up to doing this, but financial investors may find it challenging.
VLCC
Suezmax
150
10.7%, panamax up 8.6% and products up 11.7%. VLCC VLCC
125 Aframax By March 2008, the nominal price of a VLCC newbuilding
Suezmax
This
125 development was partly a function of strong demand
Panamax
Aframax has risen further to close to $150m. Suezmax
100 Products Suezmax
Panamax
40k-dwt
100 Products
75 Aframax
40k-dwt
Figure 47. Secondhand prices are peaky too (annual average 5-year old prices) Aframax
75
50
Panamax
50 Panamax
US$m
25 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
VLCC
25 50.0 53.0 71.0 58.0 54.0 70.0 108.0 117.0 118.0 Products
138.0
0 Products
Suezmax 36.5 35.0 49.0 39.0 38.0 47.0 75.0 75.0 82.0 96.0 40k-dwt
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
0
Aframax 23.5 26.0 40.0 30.0 29.0 36.0 57.5 63.0 66.5 73.0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Panamax 25.2 24.5 30.6 23.5 20.0 28.0 42.0 48.0 56.0 60.5
Products 40k-dwt 21.0 20.0 24.5 20.5 19.5 25.4 38.1 45.9 46.4 50.8
$m
150 VLCC The strong rise in modern secondhand (5-year old) values in VLCC
Suezmax
125
2007 was surprising in the context of weaker spot market
Aframax
Panamax earnings. This continued the disconnect that we had noticed Suezmax
100 Products
in 2006 when values were strengthening even as earnings
40k-dwt
Aframax
75 were weakening. Both VLCC and suezmax were up an
astonishing 17% year-on-year, aframax up almost 10%,
50 Panamax
panamax up 8% and a 40,000-dwt product tanker almost
25 10%. Tanker S&P activity was weaker as a result. However, Products
0 average annual 3-year period rates (generally the minimum 40k-dwt
1999
2000
2001
2002
2003
2004
2005
2006
2007
in 2007 compared year-on-year with 2006, but at marginal Some indication of the possibilities may be gleaned from
levels that do not appear to justify the sharp rise in values. TMT’s marketing of its G Elephant (298,500-dwt Nantong
VLCC 3-year rates were up 2.2% to $48,400; suezmax up 2006) with an asking price exceeding $180m and with a bid
1.2% to $38,600; aframax up 3.5% to $29,600; panamax at $170m allegedly already declined. The prevailing 3-year
flat at $26,900 and MR up 4.4% to 23,300 daily. We can time charter rate for a modern VLCC has at least improved
only explain this development as a combination of plentiful to $55,000 per day, a $2,500 or nearly 5% improvement on
money chasing investments and a firm belief in the future. the last week in December 2007. These latest high values
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
are evidently a response to an improved supply-side outlook
In early March 2008, we can report that values have in 2008 and improved medium-term period earnings.
continued to rise. SK Shipping is rumoured to have The plunging value of the dollar and the surging price
committed its C Prosperity (318,000-dwt HHI March 2009) of crude oil, pushing $105 per barrel and threatening to
for $163.5m to Minerva. If this sale is factual then it makes destroy marginal demand, have clearly been brushed to
one wonder what a 2008-delivery resale should fetch. one side.
500
10-60,000
450
60-120,000
400
350 120-160,000
300 200,000 dwt+
250
200
150
100
50
0
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
When all the deals are finally counted, 2007 could have Throughout 2007, the VLCC secondhand market was
been a bigger year than the record year of 2004 for characterised by deals with all manner of riders, such as
secondhand sale and purchase. Over 40% of the activity drydocking due or long period charters attached. A few
was in the smaller handysizes and over 30% in the ‘clean’ sales did provide occasional signposts through the
combined panamax and aframax segments. To some haze. In July, Samho bought the VLCC Neptune (319,360-
extent, this is reflected by our lists of representative sales dwt Hyundai Samho 2002) for $136.5m, a strong price
for 2007-2008. Where possible we have concentrated on even in the light of Blystad’s June en bloc purchase of
sales of modern, standard specification tonnage and on Venus Glory and Mars Glory (both 299,089-dwt Daewoo
sales where the price is not distorted by attached charters. 2000) for $237m. When Eastern Mediterranean bought
Tanker sales have however frequently been encumbered the Hyundai-built Else Maersk (308,491-dwt HHI 2000)
with charter options, purchase options, profit sharing and for $122m in December, it seemed that the secondhand
so on, so where we are confident in the detail, we have market would not keep up with the spike in earnings.
included these as well. Duing 2007, as noted above, a Buyers had become used to having to pay up to acquire
number of tankers were sold for conversion to bulk carriers, modern, double-hulled tonnage but interest would generally
as well as others which were sold for conversion to wane as prices rose to new record levels.
storage units or FPSOs. We have included some of
these sales in our lists, although drawing comparisons Meanwhile, the biggest tanker deal of 2007 was Energy
between these older units of variable specification is Infrastructure Acquisition Corporations’s purchase, including
not always appropriate. a variety of attached time charters, of nine VLCCs built
between 1988 and 2001 from Vanship Holdings for $778m.
Vanship, a joint venture between Univan and Fred Cheng’s profit share above the base charter hire rate of $25,500
Shinyo International, sold the ships to the New York listed daily, with Omega getting 65% of the excess when the
EIAC for $643m in cash and $135m of shares in Energy ships trade in ice conditions. At the end of September,
Infrastructure Merger Corp. This is a new company with OSG bought the 73,400-dwt newbuildings Cape Taft and
Charles Vanderperre of Univan, Fred Cheng of Shinyo and Cape Talara (delivering from New Century in 2008 and
George Sagredos of EIAC on its board. The plan is for EIMC 2009 respectively) for $125m on an en bloc charter-free
to change its name to Van Asia Tankers Limited, at which basis. The biggest deal in this segment in 2007 was BW
point Mr Sagredos will step down. The deal has in effect Shipping’s purchase of eight 76,565-dwt resales from IMC
given Cheng and Vanderperre access to the US equity for $450m en bloc. The builders are New Century with one
markets without having to IPO their business. built in 2006, five in 2007 and two to deliver in 2008. In
September, Ocean Tankers purchased five resale 73,400-
For suezmaxes, 2007 was punctuated by a few stand-out dwt New Century resales from Ahrenkiel for $67.5m each
modern deals. In January, Knutsen was reported to have with four built in 2007 and one in 2008.
paid $95.5m for the 162,000-dwt, ice-class 1A Windsor, a
newbuilding delivering ex-DSME in May. In June, Palmali Picking out comparables from the varied handysize tanker
acquired Discovery (164,533-dwt HHI 2003) for $96m and fleet is not so easy. On a year-on-year average comparison
Unicorn (152,250-dwt HHI 2002) for $94m. In July, the basis, a 5-year old 40,000-dwt product tanker gained 9.5%
slightly older Stemnitsa (147,093-dwt SHI 2000) cost Great in value in 2007 compared with 2006, rising from $46.4m
Eastern $88.5m, illustrating how firm prices for modern to $50.8m. Meanwhile, 3-year time charter rates rose only
tonnage had remained despite moribund earnings. Finally, 4.5% on a year-on-year average basis from about $22,300
in November, Nordic American Tankers paid $180m for two to about $23,300 daily. In January, Gonen (47,102-dwt
159,000-dwt newbuildings contracted originally by First Onomichi 2000) was sold to Vosco for $47.5m. In May,
Olsen from Bohai shipyard in China with delivery scheduled Juniper (47,465-dwt Uljanik 2002) and Jasmine (both
for December 2009 and April 2010. 47,355-dwt Uljanik 2002) were sold to Stealth for $100m en
bloc, reported with a bareboat charter attached at $13,650
Aframax tonnage appeared to be in demand in 2007 daily of undefined duration. In October, Vinashin was
as newbuilding prices rose almost 11%, and 5-year reported to have paid $60.5m for Lidong (50,530-dwt SPP
old secondhand values rose by almost 10%, between 2007) and then, in February 2008, a new benchmark was
the beginning and end of 2007. These increases were set for the smaller types when the ice class 1A Jag Payal
achieved despite a 9% year-on-year fall in average spot and Jag Panna (both 37,400-dwt HMD 2007) were acquired
earnings and a 3.5% year-on-year drop in 3-year time by Motia for $102m en bloc.
charter rates. In February, the German KG company Liwa
Mobiliengesellschaft acquired Nordatlantic (105,344-dwt Outlook
2001) for $59.5m with an attached 5-year time charter at
$23,500 per day. In April, GNMT of Libya acquired two At the time of writing the conclusion to this chapter in
modern sisters Celebrity and Serenity (both 105,200-dwt early March, spot WTI crude oil is trading at above $105
Sumitomo 2004) for $73m each, a notch higher than Cardiff per barrel, driven up by speculative long positions, static
Marine reportedly paid for Maersk Pristine (110,000-dwt OPEC quotas and geopolitical tensions. The armed forces
Dalian 2004) in June. In December, the spot market rally of two OPEC members, Venezuela and Ecuador, have
caused Minerva to pay $81.5m for Amalthea (107,116- only just stopped squaring off against the much larger
dwt DSME 2006). In February 2008, Stealth Maritime was military forces of neighbouring Colombia, narrowly averting
reported to have paid $152m for two New Times 2009 hostilities. February US non-farm payrolls fell 63,000 in the
resales, setting the bar for the coming year. largest monthly drop in five years, and January figures were
revised up from 17,000 to 22,000 losses. Jobs are being
In the panamax and MR segments, multi-ship deals lost in manufacturing, construction and retailing bringing
were common in 2007. Early in 2007, Omega Navigation the overall US unemployment rate to 4.8%. The dollar has
purchased two prompt delivery resale 73,673-dwt STX fallen to 1.55 to the euro, a record low, and the chorus of
ice-class 1A panamax tankers, Omega Emmanuel and economists now calling the US in recession has got louder.
Omega Theodore, for $64.5m each. The ships were The economic vibes from America are not at all encouraging
placed on a 2-year time charter to ST Shipping with 50/50 and are, for the time-being at least, quite the reverse of
1
Maersk Broker historical and forecast numbers.
Supply
Figure 50. Containership fleet and orderbook
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
These figures were large, as never before had 1.4m-teu concerns in California make the canal a safer bet than the
delivered within a single year. In the end, the figure for 2007 land bridge. Competition will come from larger ships leaving
turned out to be slightly lower at 1.32m-teu. However, the Asia westbound via Suez and terminating in the US on a
delivery schedule for 2008 has risen to 1.59m-teu and for draft shallow enough to permit port entry.
2009 to 1.74m-teu and for 2010 it is currently 1.69m-teu.
The 2007 deliveries appear to have been absorbed with Figure 51. Containership fleet profile at end-07
relative ease and this encourages the industry to keep
m-teu
raising the bar as it continues its search for that elusive
2.0
saturation point. Fleet
Orderbook
1.5
The swelling of the orderbook has been achieved mainly
by the ordering of very large and ultra large vessels well
1.0
above panamax size. 94% of the end 2007 fleet of ships
(by capacity) in the 6,000 to 6,999-teu segment, and 185% 0.5
of the end 2007 fleet of ships above 7,000-teu, are now
on order. Bear in mind that none of this ordering is for 0.0
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
pre-1978
Some deals, especially forward deliveries that have not yet 6000-6999 6,482 6,478 -0.1%
secured employment, will simply not achieve financing at 7000+ 8,279 8,429 1.8%
all given how credit markets have become progressively Total 2,382 2,467 3.6%
tighter since August 2007. US rates have fallen by 225bps
since then, and appear to have further to fall, so they are The orderbook is staggeringly large. But, as we have said
actually falling faster than banks are raising lending rates. countless times in the past, once a number of lines take
However, loan-to-value ratios, security covenants and other the lead in ordering larger ships (and Maersk is invariably
features are markedly less attractive than before. The the leader, most recently with its huge E-class series)
shipyards may be left with slots that they had assumed to then it becomes nothing short of imperative for others to
be filled and some initial down-payments may be put at risk follow suit. Once one carrier has achieved a cost advantage
of being forfeited to builders. Even before 2007 had run its through economies of scale, a lower per slot cost, then
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
course, a total of 13 super post-panamaxes of over 13,000- others will follow. There are two key motivators. The first
teu were either cancelled or the options left to expire is demand growth which needs to be satisfied via the
as charters, and presumably finance, were allegedly not principle of short-term pain, long-term gain. A boxship
available. should last 25 years so it needs to be big enough to satisfy
future, not just present, demand. In the early years, there
Figure 52. Containership deletions is the risk that copycat ordering will cause over-supply and
under-utilisation. The second is preparation for a market
downturn, at which time lower per slot costs are a bonus.
000-teu
Losses
100 This defensive mentality is the product of many years of
Scrapped
90 poor trading and overlooks the fact that chasing lower
80
costs, while creating desired efficiencies, also intensifies
70
60 the competition that ultimately leads to lower rates.
50
40 The trailblazers of scale have been Maersk, CMA CGM
30
and MSC while the traditional objectors have included
20
10 APL, Evergreen and K-Line. Early in the decade, Evergreen
0 pushed up beyond its preferred 5,500-teu size cap for the
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
first time in taking delivery of a series of five 6,000-teu
Even going back ten years ago to 1998, the level of followed by ten 7,000-teu units that are delivering between
scrapping at under 90,000-teu is unremarkable in terms 2005 and 2008. K-Line, another line traditionally more
of volume. This is less than the 91,445-teu that is comfortable with sub 6,000-teu vessels is taking delivery of
scheduled for delivery in 2008 in the smallest sub 1,000- a series of eight 8,000-teu ships between 2006 and 2009.
teu segment alone. But, it is APL that stands out for apparently breaking its
former vows regarding optimal size by venturing beyond its
5,500-teu maximum comfort zone to order eight 10,000-
teu units for delivery in 2011. Of course, these ventures
into larger sizes now seem less bold as even a 10,000-teu
vessel is a relative minnow when compared to the armada
of ships on order of over 12,000-teu, 114 at our last count.
66 HSBC Shipping Services Limited
Containerships
Ships on order of 10,000-teu and more number 175 units One estimate is that about one-third of the total container
of which only four have been contracted outside South orderbook is not yet financed and that some portion of this
Korea, these being a series of 10,000-teu vessels being will not complete, the most vulnerable being those ships
built by
m-dwt Nacks for Cosco. The balance are being built at scheduled to deliver in 2010 and beyond. About half of all
30
Hyundai
HandysizeHeavy, Hyundai Samho, Samsung, Daewoo, boxships on order are for independent owners, most of
Hanjin and STX. We are confident that these mature yards
Handymax them based in Germany. The equity funding is still available
25
will deliver on these contracts. This contrasts with our
Panamax through the KG market but the debt funding component
lack of confidence in the ability of many new and less
Post-Panamax may be more difficult to access as German banks are forced
20
mature
Capesizeyards in wider Asia being able to honour bulk carrier to restrict new credit. The total orderbook was about 60%
VLBC
contracts that they have entered into. But, even if those of the fleet by capacity at March 1st 2008, with deliveries
15
Korean yards are ready and able to fulfil their obligations, spread out over five years to 2012. In the worst case of
we suspect that some of these big series orders will not all the estimated unfinanced ships failing to deliver the
10
get financing either for lack of fixed employment or for orderbook could fall to 50% of the current fleet. But, it is
lack of available credit. Ironically, the credit crunch coincides unlikely to be that severe as in many cases cash resources
5
with the biggest shipping orderbook ever and never before will be used to pay for installments and equity ratios could
has there been such an enormous call upon the banks to be increased in order to attract debt finance for the balance.
provide debt finance.
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 54. Containership contracting trends
TEU
1,400,000
Post-panamax
1,200,000
Panamax and sub-panamax
1,000,000
800,000
600,000
400,000
200,000
0
1996-Q1
1996-Q3
1997-Q1
1997-Q3
1998-Q1
1998-Q3
1999-Q1
1999-Q3
2000-Q1
2000-Q3
2001-Q1
2001-Q3
2002-Q1
2002-Q3
2003-Q1
2003-Q3
2004-Q1
2004-Q3
2005-Q1
2005-Q3
2006-Q1
2006-Q3
2007-Q1
2007-Q3
In Q3 2007 we witnessed the contracting of 1.24m-teu of was the previous one, Q2 2007, in which 0.99m-teu was
new containerships, an all-time record. Until 2003, this was ordered. In the light of such exuberance, we may not see
a higher volume than had ever been contracted in a single such a record beaten in quite a while.
year, let alone a single quarter. The next record quarter
Fleet, Cum.
Company Ranking Fleet, # OB,TEU OB, # Total TEU % share
TEU Share
Maersk Line 1 1,676,955 448 341,149 70 2,018,104 13% 13%
MSC 2 1,232,335 369 404,110 48 1,636,445 10% 23%
CMA CGM 3 715,801 242 491,796 61 1,207,597 8% 31%
Coscon 4 443,979 148 401,574 59 845,553 5% 36%
Evergreen 5 628,898 180 8,668 2 637,566 4% 40%
Hanjin 6 336,717 77 255,270 31 591,987 4% 44%
CSCL 7 413,886 120 169,022 23 582,908 4% 47%
Hapag-Lloyd 8 490,275 141 87,500 10 577,775 4% 51%
APL 9 400,609 119 172,692 27 573,301 4% 55%
Yang Ming 10 271,888 82 261,412 41 533,300 3% 58%
NYK Line 11 343,670 89 179,000 37 522,670 3% 61%
Zim 12 238,567 82 279,518 37 518,085 3% 65%
MOL 13 323,729 103 181,410 30 505,139 3% 68%
OOCL 14 355,673 87 137,924 22 493,597 3% 71%
K-Line 15 296,420 92 157,618 32 454,038 3% 74%
Hamburg Sud 16 207,359 79 111,240 21 318,599 2% 76%
CSAV / CSAV Norasia 17 230,018 76 78,811 11 308,829 2% 78%
HMM 18 198,299 45 83,700 12 281,999 2% 79%
PIL 19 141,822 75 94,633 31 236,455 2% 81%
Wan Hai 20 133,105 76 51,324 18 184,429 1% 82%
The top 20 owners now control 82% of the global fleet unchanged from last year. Of note are the huge orderbooks
and orderbook. Consolidation is set to resume after the of MSC, CMA CGM and Cosco which now even exceed
tortuous link-ups between Maersk and P&O Nedlloyd and that of market leader Maersk Line. MSC and Cosco have
between TUI (the owner of Hapag Lloyd) and CP Ships. achieved their rapid expansion through organic growth while
In 2008, NOL (the owner of APL) and Hapag Lloyd continue CMA CGM and Maersk have used a combination of organic
to be strongly touted as merger candidates as there is a growth and acquisition.
natural fit between the two. The strengths of one appear
to counteract any weaknesses of the other on the main The bottom two in the list, PIL and Wan Hai, having
shipping lanes of the transpacific, transatlantic and Asia- embarked upon a 10-year strategic alliance in January
Europe. A matching of two leading carriers from the 2008, announced on 20 February that the agreement will
mercantile powerhouses of Singapore and Hamburg be extended into cooperation on terminal operations and
offers considerable appeal. ship repair business and joint coordination of shipbuilding
plans. They already operate joint services in the Asia-Europe
Mergers and takeovers between others might need to see trades since 2004 and in the transpacific and Black Sea
a weaker market in order to convince controlling parties of services since last year. Singapore-based PIL and Taipei-
the benefits of consolidation and assist in smoothing over based Wan Hai have been long-time intra-Asian rivals but
any cultural and philosophical differences. Otherwise, we do saw the benefit of teamwork when it came to entering the
not envisage the top 20 ranking changing very much – it is highly competitive longhaul routes.
10
Containerships
5 Demand
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
N.America
m-teu lifts
Europe
Others
Total
Asia
2001
2002
2003
2004
2005
2006
2007
2008
2009
2008 96 281 49 84 509
2009 101 314 51 91 557
For many years now container trade has been growing at Ports surveyed are LA/LB, Oakland, Tacoma, Seattle and
an average annual rate of around 10%. The rate of growth Vancouver on the west coast; Houston on the Gulf coast;
is now slowing but the underlying base is that much larger. and NY/NJ, Hampton Roads, Charleston and Savannah on
Demand is forecast to continue rising at an annual rate the east coast.
of a bit below 10% in both 2008 and 2009. The world is
bracing itself for a slowdown given the weakening US Weakening traffic growth on the transpacific,compounded
housing market and deteriorating credit markets. As loans by rising costs, is causing the lines to withdraw or
are cut off to both households and businesses, spending reposition capacity and enter new alliances. Stagnant trade
and investment will obviously suffer as these are the growth on eastbound transpacific contrasts starkly with
twin engines of economic growth and employment. The 20% growth on westbound Asia-Europe. The former route
notoriously unreliable US non-farm payroll reports for generally chooses to keep maximum ship capacity below
January and February show that employment fell by 22,000 7,000-teu, given poor productivity at west coast North
and 63,000 respectively, the latter being the largest month- American ports, whereas most ships above 7,000-teu end
on-month fall in five years. up on Asia-Europe. The withdrawal of capacity from the
transpacific for prolonged maintenance or semi-layup is
The futures market is now pricing in a further 75bps one way of keeping utilisation rates high. It also maintains
interest rate cut to 2.25% at the Federal Reserve’s next pressure on shippers to increase freight rates and agree
meeting on 18 March. The weakening dollar is helping the floating monthly bunker adjustment factors if the ships are
US-outbound export trades but insufficiently to counteract to return and service levels be preserved. If excess capacity
declining imports. The latest Port Tracker report, compiled is merely redeployed to Asia-Europe, beyond increasing
by the National Retail Federation and Global Insight, loops from eight to nine ships to save on fuel, then at some
observes that container traffic at North American ports fell point it will have a negative impact on utilisation and rate
4.3% in January 2008, compared with January 2007, and prospects on that route.
predicts a 9.6% decline in February 2008. These monthly
year-on-year US traffic declines started in August 2007 and
represent the most protracted period of decline since 1995.
Singapore has retained its 2006 crown but last year’s places while its Long Beach neighbour gained three places,
second-placed Hong Kong has been relegated to the demonstrating the relative strengths of their environmental
number three slot by Shanghai. Rotterdam and Dubai have lobbies. Far Eastern ports occupy seven of the top ten
each gained a place while Kaohsiung has dropped two league places illustrating the imbalance in infrastructure
places. The rapidly expanding Chinese ports of Qingdao, spending between east and west. Of the other three
Ningbo and Guangzhou have gained one, two and three places, two are in Europe and one in the Middle East.
places respectively, underlining the importance of China The port of New York and New Jersey has slipped
as the world’s factory floor. Los Angeles slipped three from the table.
The latest Global Insight data we have dates back to the mix of box sizes, weight limits and stability, visibility
October 2007. We may review our data source in future from the bridge, load and discharge sequences, berth and
GSMRs as this data is altered significantly from time to channel draft limitations, and so on. Neither would it be
time. For this year we present if for consistency’s sake. appropriate to use the laden figure, conventionally taken
The broad trends are about right even if we may choose to as an average 14-tonne homogenous load, as weight
quibble over the actual numbers. loads vary and the vessel’s deadweight capacity would
almost always permit a certain number of empties to
The overall supply-demand balance is apparently be repositioned. Other factors influencing real container
deteriorating as the spread widens with the steady stream capacity supply include the declining ratio of part-time
of new ships rolling out of the shipyards. We base our container capable ships in container trades and the fact
numbers on nominal capacity in the wider container capable that conbulkers and multipurpose types may now be
fleet rather than in the narrower fully cellular fleet. It is concentrating their efforts on the better paying dry
relevant to mention that at the beginning of 2006 some bulk trades.
80% of the container capable fleet was fully cellular but
by the beginning of 2009, in just three years, this ratio is In the fully cellular fleet, the appropriate representation
forecast to rise to 88%. In 2007 the supply-demand gap of a containership’s box capacity might be somewhere in
was narrow at about 1.5% after nearly 3% in 2006. But, in between the nominal and the laden figures. Re-crunching
2008 it is expected to go out to the just below 4% before all the capacity numbers based upon this adjustment would
retracing to around 3% in 2009. As already mentioned, certainly alter (i.e. reduce) our impression of available space
other factors will help to bridge this gap by reducing and explain how easily so many new ships have been
effective tonnage supply gains such as port congestion, absorbed by the market in recent years without collapsing
disparities in port throughput capabilities at opposite ends rates. The factors that constrain tonnage supply differ
of the supply chain, land-side rail and road issues, slow according to trade lane as there is no hard and fast rule.
steaming, capacity management, re-positioning for new All told, we have a modernising fleet, changing trade
services and the cancellation of some old services. dynamics and a string of years of well above trend
demand growth.
But, the most important single factor in the reduction or
elimination of the gap is the use of nominal capacity as
opposed to laden capacity. No ship ever loads up to its
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Membership of the Transpacific Stabilization Agreement volumes declined 4.6% at Los Angeles and 4.0% at Long
(TSA) expanded to 15 members, effective January 2008, Beach on a year-on-year basis. In January 2008, loaded
on the joining of China Shipping. The list of TSA members in-bound volumes fell 4.6% year-on-year at Los Angeles to
is as follows and involves the majority of the world’s 343,529-teu and by a much larger 13.8% at Long Beach
largest container shipping lines. to 261,543-teu. These figures have been warning us since
August 2007 of slowing US consumption and the latest
APL Co Pte Ltd 2008 figures tell us that household and business
consumers are accelerating the rate at which they cut
China Shipping Container Lines Co Ltd
back on spending.
CMA CGM SA
We know precisely why they are cutting back: falling home
COSCO Container Lines Ltd
values, declining employment, tighter credit, high gasoline
Evergreen Line and heating oil prices, rising food prices and a weaker dollar.
Hanjin Shipping Co Ltd In Q4, the weakening housing market lowered imports of
home furnishings and construction materials. Shipments
Hapag-Lloyd AG
of toys were hit by safety concerns (but compensated for
Hyundai Merchant Marine Co Ltd by a switch over to electronic games) while shipments
of apparel, home electronics, computers and health care
Kawasaki Kisen Kaisha Ltd
products remained robust in the second half of 2007.
Mitsui OSK Lines Ltd
According to Containerisation International’s “Freight from May 1, 2008 plus a lot more via fuel charges, thus
Facts”, the average ‘all-in’ freight rate between Asia and departing from the previous formula of ‘all-in’ rates. On the
the West Coast of North America in Q4 2007 remained westbound leg, the average ‘all-in’ freight rate of $795/teu
unchanged on the previous quarter, at $1,701/teu, but was in Q4 2007 was 2% up on the previous quarter and 1% up
2% higher than in Q4 2006. On a weighted basis, the latter year-on-year. On a weighted basis, the changes remained
was 1% down and would have disappointed carriers after all the same. These quoted all-in freight rates in each direction
the talk of higher fuel surcharges and capacity withdrawals would have left the carriers exposed as bunker fuel was up
in order to recover rising costs and keep vessel utilisation over 20% quarter-on-quarter and over 70% year-on-year.
above 90%. Under the circumstances of flat year-on-year Westbound trade grew 10% on 2006 but ships remained
cargo growth on this trade lane in the second half, it is not half full. Fuel rebates may be easier to achieve than freight
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 59. Asia-Europe container trade volumes
Global Insight forecast Global Insight’s figures for the Asia-Europe trades in 2007
m-teu
20.0 (based on the first three quarters) estimated 15.6% year-on-
18.0 year growth in the headhaul westbound direction from Asia
16.0
to Europe to 14.4m-teu and just over 5% growth on the
14.0
12.0 weaker eastbound leg to 6.1m-teu. For 2008, GI forecasts
10.0 a slower 12.6% expansion to 16.2m-teu and, in 2009, 8.9%
8.0
growth to 17.7m-teu. 2008 eastbound growth is put at
6.0
4.0 5.4% to 6.4m-teu and, in 2009, 7.4% to 6.9m-teu.
2.0 These figures fail to capture Q4 2007 movements
0.0
which may have altered GI’s full year forecasts.
2005 2006 2007 2008 2009
Membership of the Far East Freight Conference (FEFC) MSC – Mediterranean Shipping Co SA
stands at 17 members. The list of FEFC members
Nippon Yusen Kaisha
is as follows and includes the world’s largest container
shipping lines. Orient Overseas Container line
Safmarine
ANL Container Lines Pty Ltd
Yangming Marine Transport Corporation
APL Co Pte Ltd
Zim Integrated Shipping Services Ltd
CMA CGM SA
CSAV Norasia Liner Services Booming growth in 2007 – more of the same
expected in 2008
Egyptian International Shipping Co
The Far East Freight Conference announced full year 2007
Hapag-Lloyd AG
trade growth figures on Asia-Europe of 19% in 2007. Far
Hyundai Merchant Marine Ltd East/Med was up 21.8% year-on-year to 3,323,933-teu
Kawasaki Kisen Kaisha Ltd while Far East/North Europe was up 17.6% to 6,190,655-
teu. Consolidated Q4 2007 growth came in at 15.9% when
Maersk Line
compared with Q4 2006, taking the total westbound annual
MISC Berhad
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2
FEFC lines recently managed to separate the bunker surcharge
from general rate rises ending ‘all in’ prices and paving the way HSBC Shipping Services Limited
to link fuel surcharges and rebates to market movements in fuel
oil prices.
Containerships
Global Insight’s figures for the transatlantic trades in 2007 up 3% quarter-on-quarter and down 2% year-on-year. On
(based on the first three quarters) put year-on-year growth the eastbound leg, TACA’s average rate in Q4 rose by 3%
in the headhaul westbound direction
m-dwt
from Europe to North quarter-on-quarter to $1,147/teu which was 8% up on a
America at just 1.5% 30
to 3.9m-teu. Trade growth was much
Handysize
year earlier in Q4 2006.
stronger in the eastbound direction from North America
Handymax
25
to Europe at 8.2%, to 2.4m-teu, as the weak dollar/euro
Panamax On a weighted basis the eastbound changes were 10%
exchange rate boosted Post-Panamax and 18% respectively as one carrier enjoyed a particularly
20 exports from the US and Canada.
Capesize
Growth in the westbound trades is expected to rebound to large gain in volumes. Unfortunately, uncovered fuel costs
VLBC
2.8% in 2008 and 2.9%
15 in 2009 while the equivalent figures would have worsened the net end result for carriers on the
for eastbound trades are 6.6% in 2008 and 4.6% in 2009. Atlantic in 2007. TACA has made strenuous efforts to make
10 shippers aware of the difficulties with which it is faced by
TACA numbers rising fuel costs. However, in spite of this, its members
5
decided to postpone until further notice the fuel surcharge
Membership of the Transatlantic Conference Agreement
of $147/teu that was announced in mid December 2007.
has dwindled to just five carriers. TACA does not publish
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
any trade data on its website so we have no figures
Figure 61. Intra-Asia container trade volumes
against which to benchmark GI’s numbers. The members
of TACA are:
m-teu
Global Insight forecast
7.0
Atlantic Container Line AB
6.0
Maersk Line 5.0
3.0
Nippon Yusen Kaisha
2.0
Orient Overseas Container line 1.0
0.0
Evidence of US consumer weakness
2005 2006 2007 2008 2009
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 62. Total container trade volumes Far East exports to Latin America rose 12% in 2007 and
featured increased movements of chemicals, road vehicle
Global Insight forecast parts and textile fibres which more than compensated for
12% 75
10%
65 falls in textiles, plastics and electrical machinery. GI’s macro
55 forecasts of Far East export trade is for growth to fall to
8%
45
7% in 2008 after 11% in 2007 and 10% in 2006, reflecting
6% 35
continued strong growth to Europe, the Middle East and
25
4%
15 southern hemisphere but weaker trade expansion into
2%
5 North America. Far East inbound will rise by 6.4% in 2008
0% -5 compared with 10% in 2007 and 5.7% in 2006. Much of the
2005 2006 2007 2008 2009
anecdotal evidence is that Asia’s rising export trade to the
Growth N-S southern hemisphere commodity-rich nations and to other
Growth E-W
emerging markets will compensate for any weakness in the
Total N-S trades, m-teu
Total E-W trades, m-teu US-inbound trades over the next few years.
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Earnings
Freight Rates
$pd
2300
2100
Asia/US EB
1900
Asia/US EB
1700
1500 Eur/Asia EB
1300 Asia/Eur WB
1100 US/Eur EB
900
Eur/US WB
700
500
1Q 94
1Q 95
1Q 96
1Q 97
1Q 98
1Q 99
1Q 00
1Q 01
1Q 02
1Q 03
1Q 04
1Q 05
1Q 06
1Q 07
Time Charter
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 64. Average earnings change over time – the 2007 recovery
US$ pd US$ pd
40,000 30,000
35,000
25,000
30,000
20,000
25,000
20,000 15,000
15,000
10,000
10,000
5,000 5,000
1999 2001 2003 2005 2007 1999 2001 2003 2005 2007
y-o-y y-o-y
change change
120% 80%
100%
60%
80%
40%
60%
40% 20%
20%
0%
0%
-20%
-20%
-40% -40%
-60% -60%
1999 2001 2003 2005 2007 1999 2001 2003 2005 2007
19
19
19
19
19
19
19
19
19
19
19
19
19
19
20
20
20
20
Containerships
May
Sep
Jan – 06
May
Sep
Jan – 07
May
Sep
Jan – 08
Jan – 05
May
Sep
Jan – 06
May
Sep
Jan – 07
May
Sep
Jan – 08
2700 gls
1700 grd 3500 gls
2200 grd $pd 4000 gls
$pd 2500 grd 50,000
50,000
40,000
40,000
30,000
30,000
20,000 20,000
10,000 10,000
Jan – 05
May
Sep
Jan – 06
May
Sep
Jan – 07
May
Sep
Jan – 08
Jan – 05
May
Sep
Jan – 06
May
Sep
Jan – 07
May
Sep
Jan – 08
Figure 66. Maersk Broker assessment of TC rates, $pd.
In the larger sizes the lines prefer to either own tonnage Recent examples of long-term charter deals on the big
directly or engage them on long-term time or bareboat ships include talk of MPC taking over eight to ten slots at
charter from investor owners. German KG providers within HHI, vacated last November by CP Offen, for 12,500-teu
the tonnage tax regime would have to retain management, vessels costing a reported $167m each and delivering
and thus time charter, whereas a Singapore Business Trust in 2010 and 2011. Some reports put the size as 13,100-
structure may favour finance leases, and therefore bareboat teu and it is suggested that these will be time chartered
charter. About 51% of all cellular capacity in service, and to Hanjin for 12 years at $59,950 daily. Hanjin is also
53% of ships on order, is controlled by non-liner owners, taking three 10,000-teu HHI units from Danaos delivering
according to statistics compiled by AXS-Alphaliner. mid-2011 for 12 years at $54,000 daily. Meanwhile, Niki
Shipping of Greece is reported to have bareboated nine
Of ships in service of 7,500-teu capacity or more, only 37% 13,000-teu STX units delivering in 2011 to Evergreen for
are owned by non-liner operators although this rises to 47% 10 years at $51,000 daily.
when considering ships on order of this size. Evidently,
Values
Figure 67. Clarkson nominal newbuilding and 10 year old prices prices
US$m 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
750-teu newbuild 18.0 17.0 13.5 14.0 14.0 13.0 13.0 17.5 19.5 20.5 20.5 21.0
750-teu 10-yr old 11.0 9.5 8.8 6.5 8.5 5.8 6.0 7.3 11.5 12.5 13.0 13.8
1,600-teu newbuild 27.2 27.2 22.2 23.7 26.9 22.2 21.1 26.5 33.4 34.8 36.6 36.9
1,600-teu 10-yr old 20.0 17.5 11.0 12.0 15.5 10.5 11.0 15.5 28.0 24.5 24.5 26.0
2,750-teu newbuild 38.0 38.0 33.0 37.5 31.0 31.0 29.5 37.0 46.5 48.5 51.0 52.5
2,750-teu 10-yr old 26.5 21.0 15.0 17.5 22.0 17.5 17.0 22.5 37.5 32.5 36.0 41.5
3,500-teu newbuild 52.0 50.0 42.0 38.0 41.5 36.0 33.0 42.5 53.0 52.5 57.0 59.0
3,500-teu 10-yr old 30.0 26.5 23.5 20.0 26.0 20.8 22.5 26.5 41.5 37.0 41.0 48.0
4,600-teu newbuild 52.0 50.0 42.0 38.0 41.5 52.0 45.0 56.5 71.0 67.5 71.0 78.0
6,500-teu newbuild 73.0 72.0 60.0 71.0 91.0 89.0 101.0 106.5
8,200-teu newbuild 125.0 134.0
Average newbuild 37.5 36.5 30.5 30.2 38.0 37.7 33.6 41.8 52.4 52.1 56.2 59.0
Aveerage 10-yr old 21.9 18.6 14.6 14.0 18.0 13.7 14.1 17.9 29.6 26.6 28.6 32.3
---
---
---
---
--
--
--
--
--
--
--
-
--
Delivery Volumes
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Figure 69. Three-month moving average of capacity delivered by main shipytypes
120
2.5
100
2.0
80
1.5
60
1.0
40
0.5
20
- -
2002 - 01
2002 - 04
2002 - 07
2002 - 10
2003 - 01
2003 - 04
2003 - 07
2003 - 10
2004 -01
2004 - 04
2004 - 07
2004 - 10
2005 - 01
2005 - 04
2005 - 07
2005 - 10
2006 - 01
2006 - 04
2006 - 07
2006 - 10
2007 - 01
2007 - 04
2007 - 07
2007 - 10
2008 - 01
In analysing delivery trends, we have taken the three- way to a higher rate of ordering in this period as if by way
month moving average in deliveries in order to eliminate of compensation. After a period of rising delivery growth
random spikes and better illustrate the trend. The rising between end-2003 and end-2005, there was a cyclical
delivery trend in tankers from mid-2002 was in part related levelling off in bulk carrier deliveries. The 2007 dip in
to the spate of product tanker orders that followed the deliveries coincided with record earnings and values in the
Erika sinking in December 1999. Containership deliveries dry bulk sector. This triggered a wave of ordering that will
tailed off in the second half of 2007 reflecting a pause reach a delivery crescendo in 2010, according to the current
in ordering some years earlier and, conversely, this gave flawed interpretation of the orderbook.
Healthy price rises across all disciplines were registered the CRU Asian steel price index and the Clarkson’s all-ships
in 2007 as robust demand combined with rising costs and newbuilding price index, both rebased to January 1998 to
a weaker dollar. Not surprisingly, the highest gains were give us a ten-year time series. On this evidence, shipyards
made in the capesize bulk carrier segment where average would be justified in saying that they have kept their ship
prices rose 42.5% during the year from $68.0m to $97.0m. price rises below their steel cost increases. As there is still
Next was the panamax bulk carrier, up 37.5% from $40.0m no forward market for steel, shipyards have to take a view
to $55.0m, and the handymax, up almost 25% from $38.5m on future prices, thus assuming major risks.
to $48.0m. The price of a newbuilding VLCC rose over 13%
in 2007 from $129.0m to $146.0m despite a 9% fall in In a bull steel market, such as we have witnessed in the
average spot earnings with the only glimmer of excitement current decade, shipyards can only behave reactively to
all year being the belated Q4 rate spike. Surprisingly, the changes in steel prices, so the newbuilding price index
price of a suezmax gained almost 12% despite the fact that would be expected to slightly lag the steel price index.
average spot earnings fell 16% during 2007. Containers In the context of recent and anticipated future steel price
enjoyed only minor rises of maximum 7% even though increases in 2008, shipbuilders will be subject to a margin
demand for super post-panamaxes was brisk. Demand squeeze on the majority of their current backlog of projects
was only a partial factor in price changes in 2007. for which steel supply is not yet contracted. This will
encourage them either to lift newbuilding prices for new
Shipyards will claim that they have done their best to keep orders even further or to hold back from marketing far-
newbuilding prices down despite big increases in their own forward berths until their input costs and future demand
costs. The correlation between steel plate prices and ship are more clear.
prices is long-established. In Figure 71 we have compared
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Shipbuilding
Figure 71. Steel prices and newbuilding prices (indices rebased to Jan-1998)
2
2.5 R = 0.7511
2.5 CRS Newbuilding price index
CRU Asian steel price Index 2.0
2.0
CRS Newbuilding
price index
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
0.5 1.0 1.5 2.0
Jan - 98
Jan - 99
Jan - 00
Jan - 01
Jan - 02
Jan - 03
Jan - 04
Jan - 05
Jan - 06
Jan - 07
Asian steel price index
The recent agreement between the world’s leading iron ore Another problem for Asian shipyards is that they pay
suppliers and major steel mills sees FOB iron ore prices for their steel supplies in the currency of the supplier:
raised a further 65-71% per tonne, the price differential usually the won, yen and renminbi all of which have been
m-dwt
based upon quality, for the new contract year commencing appreciating against the US dollar, the currency in which
Handysize
April 1st 2008. This is slightly higher than was expected they invariably price ship sales. The currency exposure can
Handymax
and was agreed by Japanese and South Korean steel mills be exacerbated by the sourcing of, for example, main and
Panamax
that may have tired of waiting for Chinese steel mills that auxiliary engines and equipment from other Asian countries
Post-Panamax
Capesize
originally had the lead in negotiations. One large Korean and paints and cargo pumps from European suppliers,
VLBC shipbuilder estimated that this large increase in raw introducing euro exchange rate risk. In the last couple of
material cost will translate into a 10% increase in the cost years, the renminbi and yen have risen steadily relative to
of shipbuilding steel plate, and it plans to pass this on to the won. This has conferred an advantage upon Korean
customers in prices. This could result in a typical 3% price builders who earn relatively more local currency, upon
increase. Japanese builders are known to be pressuring conversion back from US dollars, than their Chinese and
their steel suppliers to hold prices as it is now becoming Japanese competitors. However, some of this advantage
difficult to price forward contracts and we may move is lost when they import steel plate and machinery from
towards a model of variable pricing linked to input costs. suppliers in these very same neighbouring countries.
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
All data re-based to 01-Jan-07 The renminbi and the yen appreciated by 10% and 16%
1.20
respectively against the dollar between the start of January
dollar-won 2007 and 10 March 2008. In that time the South Korean
dollar-yen
1.15 dollar-RMB won has weakened by about 4% having traded in a
narrower range. In reality, the Japanese builders are largely
1.10
insulated from this development by having a huge domestic
1.05 customer base and a small overseas clientele that generally
pays in yen. China has an expanding domestic customer
1.00
base which may be increasingly willing to make partial
0.95 or total payments in renminbi, but the large overseas
customer base has preferred to stick to dollar contracts.
0.90
01.01.2007
02.02.2007
06.03.2007
07.04.2007
09.05.2007
10.06.2007
12.07.2007
13.08.2007
14.09.2007
16.10.2007
17.11.2007
19.12.2007
20.01.2008
21.02.2008
Taking the list from the top down. It is no surprise to see but the deadweight and capacity of individual orders
a slowdown in orders for gas carriers as LNG liquefaction was definitely much increased. Reefers remained lightly
plants and petrochemical plants have been faced with ordered as the sector attempts to convince its customers of
lengthy commissioning delays flowing from manpower superior customer handling relative to containers, while the
and equipment shortages, technical challenges and lines consistently contest such allegations and undercut on
environmental and regulatory obstacles. Simply put, the freight in order to increase their cold market share.
market is oversupplied until beyond 2010, so a contracting
sabbatical is in order. Car carriers had no such problems in The sector that won the Oscar was dry bulk which
2007 as demand for cars amongst the emerging consumer registered a numerical year-on-year increase of 162% to
classes is driving import growth in places such as China and 1,630 ships ordered. This was 222 ships more than was
India. Ironically, those countries will increase their exports ordered in the previous three years combined. Astonishing
of fuel-efficient compacts and hybrids to European and US earnings and rising secondhand values have encouraged
markets as consumers there feel the full impact of high the large-scale reinvestment of profits back into the dry bulk
and unregulated gasoline prices, rising fuel taxes and sector. You can cut this in a number of ways. Reinvesting
‘green’ pressure. in shipping probably looks to be a better bet than investing
in equities, government bonds, residential or commercial
General cargo ships, which includes multi-purpose types, real estate and is a proxy for investing in emerging market
experienced a slower pace of ordering in 2007 after growth and hard and soft commodity demand. You get to
heavy contracting in both 2005 and 2006. Amongst other cover it all. Also, a ship lasts at least 25 years and, in 2007,
uses, these types are popular in the project cargo trades bulkers of that vintage were changing hands for as much as
and these are rising around the globe as infrastructure double what they were originally contracted for, making an
spending and investment increases in the emerging market unrivalled return over the life of the asset for that now rare
economies. After a very strong year in 2006, tanker ordering breed of cradle-to-grave owner.
fell 21% in 2007 but was still well ahead of the previous
four years in numerical terms. Containerships remained
broadly in line with the average of the previous four years,
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
Shipbuilding
Tankers
21%
Bulk
Carriers
18% Tankers
32% Bulk
Carriers
39% Box Ships
incl. Reefers
m-dwt
Box Ships 12%
30
incl. Reefers
Handysize
14%
Handymax
25
The year-on-year numerical increase in bulk carrier orders
Panamax of the shikumisen deals of old, and will remove a lot of
is plain to see Post-Panamax
as it rose to 39% of total orders in 2007 existing and incremental growth cargo from the spot
20
Capesize
compared with 18% in 2006. The share of tankers fell market. Investment in these ships is a bet on constant and
VLBC
to 21%
15 from 32% while boxships and reefers slipped elevated steel demand growth as emerging markets, chief
to 12% from 14%. Amongst the bulk carriers ordered amongst them China, India and the Middle Eastern nations,
were10many capesize and very large ore and bulk carriers industrialise and urbanise. This and the knowledge that,
that will swell the fleet in capacity terms as this decade for the patient owner willing to play the long game, even
draws5to a close. Many of these ships have been ordered ill-timed investments are usually and eventually rescued by
against lifetime contracts or cargo guarantees, an evolution future market cycles.
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Shipyards’ Market Share
Figure 75. Shipbuilding nation market share in CWT and DGT
China /
Taiwan /
HK
36%
China /
Taiwan /
Korea HK
35% 31% Korea
35%
41%
Cruise orders are largely responsible for Germany and
Italy’s place at the top of the league table and, along with
Drilling down into the purely Asian shipbuilding market, other passenger ships such as ferries, are vital to Europe’s
South Korea leads with a 41% share, followed by China continued presence in shipbuilding. So far, the ambitions
with 35% and Japan lagging behind with 20%. Vietnam, of shipbuilders in Asia to enter the cruise market have
India, Indonesia and others will no doubt increase their been kept at bay. Only about 10% of the building work
market share in future but their hunger for new orders may is in the hull form, with the vast majority of the work
be beyond their ability to digest them in the near term. As being in outfitting. This employs a vast array of specialist
we have already mentioned, the same observation can be subcontractors that Asian yards lack, thus frustrating
applied to a yet-to-be-quantified number of new Chinese their efforts. Mitsubishi did deliver two ships in 2004 for
shipyards. Shipyard delays, non-performance, bankruptcies Princess, the Sapphire Princess and Diamond Princess,
and failed renegotiations will serve to reduce the size of the otherwise Asian builders have been absent. Samsung is
forward orderbook, particularly in the bulk carrier sector. known to be keen to enter the sector while STX has stolen
a lead in buying 39.3% of Aker Yards via STX Norway. This on most cargo ships although Europe still holds sway in
could be the vehicle through which the Asian yards will certain niche sectors, usually for European customers.
finally penetrate the cruise market. These include providing a range of products for the UK and
Norwegian offshore markets, although large rigs, semi-
Europe is far from ceding its dominant position in passenger submersibles, FPSOs and many PSV and AHTS orders have
ships and will jealously guard its primacy having lost most gone the same way as the cargo ships, to Asia. Smaller
conventional commercial ship types to shipbuilders in containerships in Germany, product tankers in Croatia and
Japan, South Korea and China. Technology, labour and car carriers in Poland are illustrations of a continuing, albeit
productivity advantages, anchored to large homegrown weakening, presence in the commercial ships market.
customer bases, have given the Asian shipyards the edge
Yard nation Delivery in Delivery in Delivery in Delivery in Delivery in Delivery in Grand Total Market
2008 2009 2010 2011 2012 2013 Share
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
Handymax
25
Panamax
Post-Panamax
Rising Input Costs 20 availability of product. German steelmaker ThyssenKrupp
Capesize
and Italy’s
VLBC
Ilva agreed similar levels and Baosteel finally
Figure 79. Steel prices heading for records
15 struck its own deal with Vale towards the end of February
which will see fines rise 65% to $118.98 per tonne FOB
Hot Rolled Plate 10
$ per tonne and higher quality Carajas ore rise 71% to $125.17 from
Hot Rolled Coil
$900 $72.20 per tonne FOB. Baosteel is expected to raise Q2
5
$800 prices of its main products, including hot rolled plate, by
$700 about 10% in response to rising input costs.
$600
Pre-1972
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
$500 Figure 80. Asian steel index now running higher
$400 than global index
$300
Jan – 03
Jul
Jan - 04
Jul
Jan - 05
Jul
Jan - 06
Jul
Jan - 07
Jul
contract prices for iron ore fines commencing 1st April 160
2008. Nippon Steel, JFE Holdings and POSCO were the 140
prices rising 65% above the levels prevailing for the 2007/8 100
financial year. These higher prices should be viewed in the
Jan – 04
May
Sep
Jan - 05
Sep
Jan - 06
May
Sep
Jan – 07
May
Sep
Jan - 08
May
Asian steel prices are now higher than global prices as Cido, AP Moller and Geden. Container-orientated owners
demand is focused upon Asian buyers. Shipbuilders in include CP Offen, CMA-CGM, Peter Dohle, MSC, Rickmers,
Japan and Korea are lobbying steelmakers not to raise steel Seaspan, Danaos and NSC and therein lies the roots of the
plate prices but this is likely to be to no avail as the steel massive pipeline of large containerships. Specialist owners
industry is facing minimum 65% increases in contracted include Qatar Gas with its large block of huge LNG carriers
iron ore prices and possibly a doubling of hard coking coal and Carnival with its panoply of cruise ship orders.
contract prices. Samsung Heavy Industries has already
made clear that it will pass on the full impact of increased Long-term Over-Capacity Looms
steel to shipowners suggesting that newbuilding prices It is difficult not to believe that we are faced with the
will continue to be well supported in 2008. Only should prospect of significant over-capacity once we enter the new
shipbuilding capacity get well ahead of newbuilding demand decade. At the end of 2007, there was minimal available
in coming years will prices come under pressure. Future capacity in 2010, something in the order of only 10m-dwt.
shipbuilding capacity has become as murky as forward An estimated half of 2011 is still available and the vast
demand given the huge size of the orderbook, but average majority of 2012 and 2013 capacity is unspoken for. Unless
year-on-year dry bulk rates look certain to fall by latest 2010 demand continues at the supercharged levels of the past
and this will impact on demand. four years, as well it might, then there should be a cyclical
slowdown in fresh ordering as owners absorb and take
Figure 81. Leading customers of global shipyards by CGT stock of their existing commitments. Prices are now at
record highs and, as they are now driven as much by cost
Owner Dwt # ships CGT
factors as demand, are becoming divorced from earnings.
MOL 12,057,240 125 3,834,969
A capesize ordered today needs to earn more than 40%
NYK 11,853,400 122 3,544,800 greater net profit today in order to break even than it did
COSCO 12,599,800 141 3,441,345 one year ago and, by implication, this will be achieved over
C P Offen 6,711,000 77 2,986,704 a longer period and maybe several or multiple cycles.
A P Moller 6,173,398 118 2,824,248
Qatar Gas 3,340,000 25 2,651,844 We have already drawn attention to widespread suspicions
that many ships, especially bulk carriers, that have been
China Shipping 10,708,700 80 2,401,078
ordered will never be delivered. This will result from
K-Line 7,791,243 73 2,349,546
new shipyards not getting built and others struggling
Cido Shipping 6,688,484 108 2,288,387
to secure mandatory refund guarantees and adequate
Carnival 121,912 21 2,108,497
financing to meet the challenge of rising costs and greater
CMA-CGM 4,519,180 46 2,023,436 environmental and regulatory scrutiny. Ships now have
Peter Dohle 4,404,720 71 2,012,811 to be built to more exacting rules and some new yards,
MSC 2,614,002 33 1,699,007 particularly in broader Asia, will not be able to cope. Steel
John Fredriksen 7,184,802 62 1,548,736 cost pressures have already caused one Korean yard to
Zodiac 3,039,110 45 1,459,021 switch to building single-hull bulk carriers having agreed
Rickmers Reederei 2,760,310 56 1,426,654 to build double-hulls. Other yards are finding that they
Seaspan 3,036,200 39 1,418,186 cannot compete with the established majors when it comes
to procuring scarce supplies of engines and equipment
Danaos 2,894,500 34 1,343,383
and they will either delay or default. These failures will
Geden Line 5,203,900 53 1,239,077
considerably ease actual supply to more comfortable levels.
NSC Schiffahrt 2,529,100 40 1,230,510
On the buyer’s side, finance is now an issue as we have
It is interesting to see the Japanese powerhouses of MOL
gone in one short year from a market awash with bank loan
and NYK leading the customer chart as they embark on
liquidity to a market starved of debt finance opportunities1.
a massive fleet renewal program. In third place is Cosco
as it attempts to capture a larger share of China’s import 1
To qualify, since August 2007 Fed rates have decreased by
and export trade, as directed by the central government, 225bps, faster than bank loan rates might typically have risen, but
supported by China Shipping in seventh place. Other reduced tenors and more restrictive loan covenants have generally
made borrowing less attractive.
owners in the list with multi-discipline orders include K-Line,
----
so they have the means to increase the equity portion contracts are not all located in China as has been
to 100% if necessary. But, this will pay for fewer ships commonly assumed, but range from South Korea to
---
and most owners, especially the newer breed of investor Indonesia and Vietnam to India. The challenges faced
owners, need the debt leverage in order to maximise by all shipbuilders are immense given labour, machinery,
---
returns to levels either promised or expected. We know of steel and equipment shortages, rising input costs,
---
blocks of capesize bulk carriers and large boxships that have technical challenges, foreign exchange risks, higher
no debt finance in place. Failure to secure bank finance may insurance charges and limited availability of finance. These
---
lead to forced resales and even default. Banks are now very are discomforting to the world’s largest shipbuilders but
---
choosy to whom they lend and it is on the basis of much are greatly amplified when applied to start-ups and smaller
--
higher spreads and must more restrictive covenants. A pair businesses. On the buy side, the risk of fire sales of ships
--
of VLOCs were recently cancelled on the basis of adverse that can no longer be financed could destabilise the resale
--
banking terms despite having 15-year employment. and secondhand markets. Looking beyond 2008, the risks
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
--
of a market correction are made all the greater by the sheer
--
Figure 82. Capacity forecast significantly upgraded number of ships of all types that are scheduled for delivery.
--
- --
Weaker earnings would undermine prices until they match
m-dwt Capacity Forecast Available Capacity at end-07 - -income opportunities.
180
160 We take comfort from the fact that the orderbook is
140
stretched out over an unprecedented five year period,
161
152
165
165
165
120
162
150
100
which reduces the capacity impact as new deliveries are
79
20
builders, the orderbook is not so much tamed as becoming
4
3
0
2008 2009 2010 2011 2012 2013 less threatening in appearance. The legacy of the Hebei
Spirit will probably be that it has shortened the life of most
We have had to increase our capacity forecast to take single-hull VLCCs, and maybe tankers in general, by up to
account of the amount of ships on order. However, it seems five years and it has increased the single-hull discount. 2010
likely to us that nominal capacity will be a very poor guide to looks to be the peak of the VLOC deliveries and, should
shipyard performance in the coming years. they all deliver on time, then they will likely exert downward
pressure on dry bulk rates from the top end. The wave of
Shipbuilding Outlook super post-panamax boxships that will deliver over the next
five years will need a good demand-side and infrastructure
We have a record orderbook which spans all three main
response, but should precipitate the long-awaited scrapping
sectors and makes the armada of tanker deliveries of the
of older ships.
1970s look more like a flotilla today. That over-indulgence
gave way to a 15-year bear market for tankers. Today we
are assuring ourselves that this time it is different because
we have a get-out-of-jail-free card in the form of a second
industrial revolution as emerging markets urbanise at an
astonishing pace. There is little doubt as to the validity of
this observation but the process is unlikely to be without
some bumps along the road, and those may prove painful
should the full orderbook deliver and should owners fail to
curb their enthusiasm for new ships. However, there are
real restraints upon the nominal orderbook as shipyards
have promised more than they can actually deliver and
owners have committed to more than they can actually
pay for.
--
---
---- ----
-----
------ ------
- - - - --
- ---------
--
- --
--
---
---
---------------
Global
Global Shipping
Shipping Markets
Markets Review
Review 2008
2008 111
Reported Vessel Hull Dwt Built Period Rate, $pd Charterer Comment
(months)
Aug-07 SCF Caucasus DH 159,173 2002 35-37 38,500 BP
Aug-07 Intisar DH 102,850 2002 11-13 34,000 Teekay
Aug-07 Zaliv Amerika DH 102,357 2008 35-37 29,500 Tesoro
Aug-07 General Zamora DH 68,198 1993 11-13 30,750 PDVSA
Aug-07 Ioannis P DH 46,349 2003 23-25 24,000 Petrobras
Aug-07 Silvia DH 35,841 2000 11-13 22,500 Navig8
Sep-07 Millennium DH 301,171 1998 59-61 45,000 STX PanOcean
Sep-07 Sks Skeena DB 159,000 2006 18-24 39,000 Shell
Sep-07 Nassau Spirit DH 107,181 1998 35-37 29,000 ConocoPhilips
Sep-07 NS Commander DH 105,000 2006 23-25 29,000 Trafigura
Sep-07 Eagle Hope DH 73,800 2008 35-37 28,000 Norden
Sep-07 Gulf Progress DH 64,959 2000 11-13 27,500 Vitol
Sep-07 Silver Lining DH 45,800 2003 35-37 22,700 Petrobras
Oct-07 Crudesun DH 306,000 2007 35-37 51,500 TMT
Oct-07 Crudesky DH 306,000 2007 35-37 51,500 TMT
Oct-07 Althea DH 84,992 1999 11-13 32,000 Teekay
Oct-07 Fedor DH 70,000 2003 11-13 27,500 Teekay
Oct-07 St. Michaelis DH 51,000 2005 11-13 23,300 PTT IMO 2
Oct-07 St. Pauli DH 47,149 2003 23-25 22,500 ST Shipping
Oct-07 St. Georg DH 47,141 2002 23-25 22,500 ST Shipping
Nov-07 Utah DH 299,498 2001 35-37 45,000 CSSSA
Nov-07 Matterhorn Spirit DH 114,980 2005 23-25 32,000 Eiger
Nov-07 Mare Adriacum DH 110,500 2004 11-13 31,000 Shell
Nov-07 High Venture DH 51,087 2006 17-19 24,000 Cargill
Nov-07 Chemtrans Petri DH 47,228 2000 11-13 22,500 Trafigura
Nov-07 Pro Giant DH 46,732 2004 23-25 23,000 FR8
Nov-07 Torm Ragnhild DH 46,186 2005 35-37 22,500 Vela
Dec-07 Neptune DH 319,360 2002 35-37 52,500 TMT
Dec-07 Smiti DH 281,000 2005 12-15 52,500 BP
Dec-07 Nataly DH 142,498 1993 11-13 36,000 Russian
Dec-07 Pink Sands DH 93,891 1993 35-37 27,450 ExxonMobil
Dec-07 Piltene DH 51,800 2007 11-13 24,500 Vitol
Jan-08 La Paz DH 299,700 1995 11-13 65,000 TMT
Jan-08 Venture Spirit DH 298,287 2003 47-49 47,500 Wah Kwong
Jan-08 Ocean Emerald DH 152,680 1991 11-13 31,000 TNK
Jan-08 Maria M DH 40,000 2006 11-13 22,750 Not reported
Feb-08 Spyros DH 319,000 2007 11-13 70,000 TMT
Feb-08 Crude Progress DH 300,000 2002 11-13 70,000 Not reported
Mar-08 Kaspar Schulte DH 72,650 2004 Nov-13 29,750 Vela
Jan-07 Germany 60,200 4,158 3,124 1996 0 24,000 24 MSC 23.0 150.0
Jan-07 Maersk Tampa 53,310 3,466 2,723 1984 0 19,100 36 MSC 23.0 160.0
Jan-07 Najade 37,900 2,702 2,095 2007 0 19,300 24 K-Line 221.8 88.0
Jan-07 Pona 37,570 2,741 2,116 2007 0 18,750 12 CMA-CGM 22.0 80.0
Jan-07 Leda Trader 34,000 2,442 1,886 2000 3x40 19,250 24 MOL 21.8 75.0
Jan-07 Kyoto Tower 21,900 1,798 1,260 2007 0 14,500 12 WHL 19.7 60.4
Jan-07 August Schulte 34,622 2,566 1,853 2001 4x45 19,850 24 NYK 20.5 80.0
Jan-07 Paris 1,743 1,310 11,650 1990 3x40 11,650 24 PIL 18.8 48.0
Feb-07 HLL Baltic 65,734 4,306 3,046 1995 0 29,000 48 APL 24.2 160.0
Feb-07 Conti Cartagena 33,000 2,456 1,780 1997 3x40 20,000 24 MOL 21.0 69.0
Feb-07 Baltrum Trader 34,017 2,472 1,851 1999 3x45 19,000 24 CLAN 21.0 67.0
Feb-07 HLL Pacific 58,200 4,701 3,270 2002 0 27,500 60 APL 25.0 144.0
Feb-07 San Antonio 30,538 1,829 1,350 2002 2x40 19,400 24 HMM 19.4 61.0
Feb-07 Viking Eagle 23,579 1,740 1,295 2005 2x20 15,500 12 Wan Hai 20.5 58.0
Feb-07 Cape Mondego 37,800 2,742 2,116 2006 0 20,750 12 DAL 21.8 93.0
Feb-07 Cape Fulmar 20,250 1,440 1,050 2007 0 12,500 12 CMA-CGM 19.8 52.8
Feb-07 HS Scott 38,250 2,778 2,005 2007 0 20,750 12 CMA-CGM 23.0 110.6
Feb-07 Olivia 27,950 2,690 2,080 2007 0 19,300 24 K-Line 21.8 88.0
Feb-07 Nordspring 44,985 3,586 2,501 2007 0 24,500 36 CMA-CGM 23.4 121.0
Feb-07 Stadt Koeln 23,850 3,388 2,425 2007 0 28,350 36 Cosco 22.4 106.0
Feb-07 Northern Dedication 41,500 3,534 2,353 2007 0 25,000 60 PIL 23.5 122.0
Feb-07 Christina A 22,100 1,604 1,163 2007 3x45 15,000 12 K-Line 19.0 49.0
Feb-07 Arelia 39,200 2,732 2,150 2007 3x45 22,000 24 CLAN 22.2 99.0
Feb-07 Conti Salome 31,200 2,122 1,530 2007 3x45 18,500 24 CMA-CGM 21.8 65.0
Mar-07 Fabian Schulte 22,250 1,608 1,086 1997 3x45 14,200 24 CMA-CGM 21.0 60.5
Mar-07 Buxhansa 33,300 2,460 1,828 1998 3x40 20,500 24 CMA-CGM 21.0 69.0
Mar-07 Francisca Schulte 22,250 1,608 1,086 1998 3x45 15,000 12 CMA-CGM 21.0 60.5
Mar-07 Otto Schulte 25,685 1,702 1,330 1999 0 15,100 12 UASC 20.0 66.0
Mar-07 Jupiter 34,000 2,452 1,881 2001 0 21,500 36 Hamburg Sued 21.0 75.0
Mar-07 CSCL Yantai 33,900 2,452 1,886 2001 3x45 21,500 36 Hamburg Sued 21.8 75.0
Mar-07 Juturna 33,917 2,452 1,886 2001 3x45 21,000 38 Hamburg Sued 21.8 75.0
Mar-07 ER Bremerhaven 33,800 2,496 1,810 2002 3x45 18,500 12 MSL 22.1 88.0
Mar-07 ER Bremen 33,800 2,496 1,810 2003 3x45 21,000 24 CCNI 22.1 88.0
Mar-07 Flottbek 16,000 1,600 1,090 2005 0 16,600 12 Hapag Lloyd 20.0 49.5
Mar-07 Cape Flint 20,250 1,440 1,050 2006 0 13,150 12 MCC 19.7 5.7
Mar-07 Ava 20,600 1,578 1,065 2007 0 14,500 12 TSL 20.0 47.0
Mar-07 King Andrew 37,800 2,741 2,116 2007 0 21,700 24 CSAV 22.0 79.0
Mar-07 King Aaron 37,800 2,741 2,116 2007 0 21,700 24 CSAV 21.8 88.0
Mar-07 HS Bach 44,985 3,586 2,501 2007 0 26,750 48 CMA-CGM 23.4 130.0
Mar-07 Nordsummer 44,985 3,586 2,501 2007 0 26,950 48 K-Line 23.4 121.0
Apr-07 Asian Trader 20,794 1,404 1,186 1991 0 13,500 12 Zim 19.0 41.0
Apr-07 Marcrotone 23,456 1,687 1,180 1994 0 14,600 12 STX PanOcean 19.0 48.5
Apr-07 Westerhever 22,340 1,572 1,100 1994 3x40 14,400 24 APL 19.5 53.0
Apr-07 Buxmoon 23,150 1,687 1,191 1995 0 14,600 12 STX PanOcean 19.0 48.0
Apr-07 Sofia Russ 22,984 1,728 1,115 1996 3x40 15,250 12 CCNI 19.5 51.5
Apr-07 Conti Bilbao 33,300 2,460 1,810 1997 3x40 20,500 36 APL 21.0 69.0
Apr-07 Helene J 26,260 1,900 1,330 1997 3x45 15,900 12 CMA-CGM 20.0 60.0
Apr-07 Westermoor 35,600 2,730 2,000 2001 3x45 23,500 24 IRISL 23.0 99.0
Apr-07 Janus 34,000 2,452 1,886 2001 3x45 21,000 38 Hamburg Sued 21.0 75.0
Apr-07 ER Wilhelmshaven 34,859 2,496 1,780 2002 3x45 22,000 24 Hapag Lloyd 22.1 88.0
Apr-07 HS Chopin 44,985 3,586 2,501 2007 0 27,250 48 Zim 23.4 130.0
Apr-07 GE Lessing 23,400 1,740 1,330 2007 2x40 16,150 12 CSAV 21.0 64.0
Apr-07 Hansa Papenberg 23,579 1,740 1,295 2007 2x40 15,250 24 CLAN 21.0 64.0
Apr-07 Leopold Schulte 23,579 1,740 1,330 2007 2x40 15,000 24 Hamburg Sued 21.0 64.0
May-07 Cape Race 35,071 2,259 1,920 1993 4x40 21,000 36 MSC 20.0 67.5
May-07 ER Hobart 33,523 2,004 1,552 1994 0 15,500 36 MSC 19.0 63.0
May-07 London Tower 23,884 1,525 1,250 1994 2x40 15,250 12 PIL 19.0 43.0
May-07 Elbe Trader 22,525 1,600 1,090 1994 3x40 15,450 12 TS Lines 21.0 59.0
May-07 Amasis 35,020 2,908 2,090 1995 0 22,500 36 CMA-CGM 22.0 90.0
May-07 Cap Colville 23,083 1,510 1,200 1997 0 14,250 12 PIL 19.0 44.0
May-07 Vancouver 27,100 2,113 1,514 1997 4x40 18,100 24 CMA-CGM 20.0 51.0
May-07 Contship Rome 30,781 2,171 1,748 1998 3x45 21,500 23 Hapag Lloyd 20.5 86.0
May-07 Weserwolf 39,300 2,732 2,267 1999 0 25,000 42 UASC 22.5 85.5
May-07 Santa Felicita 30,200 2,169 1,668 1999 2x45 20,750 12 CCNI 19.7 50.7
May-07 Hansa Kristiansand 20,630 1,550 1,029 2002 2x20 14,995 12 MOL 20.5 55.0
May-07 Hermann Wulff 39,300 2,732 2,267 2006 0 25,000 42 UASC 22.2 89.0
May-07 Buxharmony 37,900 2,702 2,095 2007 0 22,900 36 CLAN 21.8 88.0
May-07 Northern General + 53,480 4,294 2,820 2008 0 27,000 60 Hamburg Sued 24.0 134.0
4 newbuilds
May-07 Rio Cadiz 55,400 4,300 2,900 2008 0 28,950 60 CSAV 24.0 140.0
May-07 Rio Charleston 55,400 4,300 2,900 2008 0 28,950 60 CSAV 24.0 140.0
May-07 4x Schulte 85,000 7,000 4,912 2009 0 37,250 60 APL 25.0 220.0
newbuilds
Jun-07 Buxlagoon 23,456 1,687 1,180 1994 0 15,850 12 CMA-CGM 19.0 48.5
Jun-07 Marcampania 23,150 1,684 1,152 1994 3x40 15,600 24 NDAL 19.0 48.0
Jun-07 Zrin 35,100 2,275 1,908 1994 4x40 21,900 24 Hapag Lloyd 19.6 64.0
Jun-07 Mare Caspium 34,600 2,959 2,018 1995 0 25,000 48 CMA-CGM 22.0 85.0
Jun-07 Magnavia 30,300 2,078 1,705 1996 0 20,150 12 KMTC 21.5 68.0
Jun-07 Merkur Cloud 22,026 1,584 1,086 1996 3x40 15,500 24 Hanjin 21.0 60.5
Jun-07 Hanse India 43,368 3,424 2,411 1997 0 29,000 36 IRISL 22.5 100.0
Jun-07 Nordriver 22,420 1,684 1,100 1997 3x45 15,700 12 CMA-CGM 20.0 49.5
Jun-07 Champion 30,450 2,080 1,670 1998 3x40 20,000 12 MOL 21.0 72.0
Jun-07 ER Hamburg + ER 30,705 2,074 1,744 1998 3x40 22,250 36 Maersk 21.0 86.0
Santiago
Jun-07 CSAV Peru 33,568 2,474 1,950 1998 3x45 21,900 24 Hapag Lloyd 21.0 66.5
Jun-07 Wehr Flottbeck 23,040 1,730 1,120 1999 3x40 15,500 12 CCNI 20.0 54.5
Jun-07 Hansa Augustenburg 23,508 1,740 1,295 2003 2x40 16,000 12 NYK 20.5 58.0
Jun-07 Cosco Boston & 67,410 5,100 3,350 2007 0 38,000 24 CMA-CGM 24.3 164.5
Cosco New York
Jun-07 Posen 37,570 2,741 2,116 2007 0 26,950 24 OOCL 22.0 80.0
Jun-07 Northern Debonair + 42,318 3,524 2,353 2007 0 28,000 66 CSAV 23.5 122.0
Northern Defender
Jun-07 Hansa Cloppenburg 23,500 1,740 1,330 2007 2x40 15,500 24 NDAL 21.0 64.0
Jun-07 Santa Brunella + 38,200 2,824 2,030 2008 0 21,500 36 Hamburg Sued 24.0 95.0
Santa Bianca
Jun-07 4x Schulte 50,500 4,253 2,805 2009 0 27,000 60 UASC 24.5 133.0
newbuilds
Jul-07 Conti La Spezia 23,300 1,597 1,148 1990 0 15,850 12 Seacon 18.0 45.0
Jul-07 Libra Australia II 24,444 1,432 1,212 1994 0 14,950 12 OOCL 18.7 42.3
Jul-07 Santiago 32,380 2,000 1,600 1996 3x40 22,500 32 WSL 20.0 65.5
Jul-07 Northern Grandeur 61,100 4,787 3,355 1998 0 34,700 60 CSAV 24.5 164.0
Jul-07 Fei Yun He 25,723 1,702 1,305 2000 0 17,250 24 Wan Hai 20.0 101.0
Jul-07 Marchicora 20,501 1,300 1,000 2000 2x60 13,500 36 NDAL 16.7 30.0
Jul-07 Hansa Oldenburg 23,508 1,740 1,330 2002 3x40 18,650 12 Seacon 20.5 58.0
Jul-07 Hansa Brandenburg 23,579 1,740 1,330 2003 2x40 17,250 24 BTL 20.5 58.0
Jul-07 Wilhelm Busch 23,400 1,740 1,275 2007 2x40 17,000 12 Hapag Lloyd 21.0 55.0
Jul-07 Quadriga 42,250 3,414 2,410 2008 0 28,500 60 CSAV 23.2 105.0
Aug-07 Helene Rickmers 23,106 1,728 1,120 1998 3x40 17,850 24 CMA-CGM 20.0 54.5
Aug-07 Oder Trader 30,300 2,008 1,628 1998 3x45 22,750 30 Safmarine 20.8 73.0
Aug-07 Viona 22,200 1,875 1,285 2006 3x45 19,250 24 Safmarine 21.0 67.0
Sep-07 Northern Fortune 30,685 1,899 1,600 1991 0 21,000 24 Hanjin 19.2 65.0
Sep-07 Jolly 29,693 2,098 1,700 1992 0 22,500 12 Hanjin 18.0 47.0
Sep-07 Cap Colorado 24,066 1,510 1,200 1997 0 17,500 12 Seacon 19.0 44.0
Sep-07 Cape Negro 24,133 1,510 1,249 1998 0 18,000 12 Seacon 20.0 44.0
Sep-07 Euro Max 29,300 2,732 2,267 2004 0 27,900 48 CMA-CGM 22.5 80.0
Sep-07 Sima Sadaf 20,250 1,440 1,050 2007 0 16,150 12 STX PanOcean 19.6 45.0
Sep-07 Madison Strait 25,899 1,795 1,312 2007 2x40 15,000 60 MOL 20.5 60.0
Sep-07 Mario A 22,100 1,604 1,163 2007 3x45 18,000 12 Hapag Lloyd 19.0 49.0
Sep-07 Northern Dexterity + 53,350 3,534 2,353 2008 0 28,000 60 APL 23.5 122.0
N. Dependent
Oct-07 Independent Action 20,455 1,388 1,030 1992 0 15,250 12 IRISL 17.0 39.0
Oct-07 Lal Bahadur Shastri 18,966 1,869 1,534 1993 0 17,800 12 OOCL 17.5 43.0
Oct-07 San Fernando 20,050 1,512 1,188 1996 2x40 17,250 12 MSC 19.7 47.0
Oct-07 Dorothea Rickmers 23,027 1,728 1,120 1998 2x40 17,600 24 CMA-CGM 20.0 54.5
Oct-07 Violetta 22,200 1,856 1,285 2007 3x45 18,500 12 CMA-CGM 21.0 67.0
Oct-07 Haugsburg 23,579 1,740 1,330 2008 2x45 18,000 24 Wan Hai 21.0 64.5
Oct-07 2x Doehle newbuilds 52,300 4,200 2,875 2009 0 30,125 60 UASC 24.2 133.0
Oct-07 4x Offen newbuilds 50,500 4,253 2,805 2009 0 30,125 60 UASC 24.5 133.0
Nov-07 Hansa Africa 43,600 3,424 2,411 1997 0 31,400 36 CLAN 23.5 115.0
Nov-07 Wehr Altona 23,051 1,730 1,120 1997 3x45 16,800 21 CCNI 19.6 54.5
Nov-07 Wehr Koblenz 23,001 1,730 1,120 1998 3x45 16,800 21 CCNI 19.6 54.5
Nov-07 Wehr Rissen 23,190 1,730 1,120 1999 3x45 16,500 12 MOL 19.6 54.5
Nov-07 Mi Yun He 24,259 1,432 1,200 2000 0 17,400 17 Simatech 19.0 38.0
Nov-07 Hansa Liberty 33,899 2,478 1,898 2000 3x45 27,500 24 STX PanOcean 22.0 78.0
Nov-07 Torge S 33,216 2,450 1,896 2003 3x40 27,000 28 Hapag Lloyd 22.5 79.8
Nov-07 Hansa Coburg 23,579 1,740 1,330 2007 2x40 18,000 24 NDAL 21.0 64.0
Dec-07 Wilhelm E 20,406 1,452 1,034 1995 0 14,500 15 Yang Ming 18.0 45.3
Dec-07 Corelli 15,475 1,445 1,119 1997 0 15,475 12 GSL 18.0 35.0
Dec-07 Sevilla 25,900 1,812 1,312 2008 2x40 17,800 17 Westwood 50.2 45.0
Jan-08 Zenit 21,500 1,617 1,203 1998 3x45 15,500 45 MOL 20.5 70.0
Jan-08 Marcalabria 23,150 1,684 1,152 1993 3x40 17,800 30 CCNI 19.0 45.8
Jan-08 Cape Magnus 37,800 2,742 2,115 2008 0 27,250 18 UASC 22.0 85.0
Jan-08 King Brian 24,200 1,706 1,250 2008 0 17,000 12 OOCL 19.5 50.0
Jan-08 Helene C 32,800 2,450 1,820 2006 3x40 27,100 24 K-Line 22.5 80.0
Jan-08 San Adriano 28,324 1,819 1,300 2008 3x45 19,500 18 UASC 21.8 82.6
Jan-08 Viking Eagle 23,579 1,740 1,295 2006 2x40 17,850 24 K-Line 20.5 58.0
Feb-08 Just Trader 20,250 2,462 1,851 1998 3x45 20,250 24 Maruba 21.0 67.0
Feb-08 Conti Lissabon 39,000 5,744 4,172 2000 0 33,500 96 Hanjin 26.0 210.0
Feb-08 El Zorro 13,769 1,118 700 2006 0 12,300 12 GSL 19.5 36.0
Feb-08 Sinotrans Tianjin 37,856 2,742 2,126 2005 0 28,300 18 RCL 22.5 80.5
Feb-08 Scotia 25,360 1,716 1,295 2000 3x45 19,500 12 Hapag Lloyd 21.0 64.0
Feb-08 Wehr Blankanese 23,021 1,726 1,210 1999 2x40 17,750 22 K-Line 19.6 54.0
Mar-08 Pontresina 32,900 2,700 2,010 2008 0 26,000 48 PIL 23.0 93.0
Mar-08 Samaria 25,414 2,000 1,714 2000 3x40 18,500 12 ZIM 21.0 64.0
Mar-08 Hansa Aalesund 20,461 1,550 1,029 2001 2x40 17,400 12 K-Line 20.0 50.0
Jan-07 OOCL Belgium 2,808 40,972 1998 Daewoo HI 480.0 Luxembourg En bloc, price all
buyer
Jan-07 OOCL Britain 5,344 67,958 1996 Mitsubishi Kobe
Jan-07 OOCL California 5,344 67,765 1995 Mitsubishi Nagasaki
Jan-07 OOCL America 5,344 67,741 1995 Mitsubishi Nagasaki
Jan-07 OOCL Japan 5,344 67,752 1996 Mitsubishi Nagasaki
Jan-07 OOCL Rotterdam 8,063 99,518 2004 Mitsubishi Nagasaki
Jan-07 OOCL Hong Kong 5,344 67,637 1995 Samsung HI
Jan-07 OOCL China 5,344 67,625 1996 Samsung HI
Feb-07 APL Holland 5,510 67,500 2001 Samsung HI 88.0 APL En bloc, price
each, p.opt.
Feb-07 APL Scotland 5,510 67,500 2001 Samsung HI
Feb-07 Maersk Rimini 1,048 15,174 1990 J J Sietas 10.9 Dania Marine
Feb-07 Providence 1,684 22,420 1995 Szczecin 21.2 Komrowski
Feb-07 Maersk Vancouver 1,678 22,308 2001 J J Sietas 123.0 IMTC En bloc, price all
Feb-07 Maersk Valletta 1,678 22,300 2002 J J Sietas
Feb-07 Maersk Vigo 1,678 22,200 2002 J J Sietas
Feb-07 Maersk Venice 1,678 22,308 2002 J J Sietas
Feb-07 CMA-CGM Lilac 2,824 39,295 2005 Hyundai Mipo 47.0 Papathomas En bloc, price
each
Feb-07 CMA-CGM Violet 2,824 39,200 2006 Hyundai Mipo
Feb-07 CMA-CGM Camellia 2,824 39,200 2006 Hyundai Mipo
Feb-07 CMA-CGM Dahlia 2,824 39,200 2006 Hyundai Mipo
Mar-07 Kestrel 1 1,939 25,684 1988 Gdansk Lenina 14.0 Cosmoship En bloc, price
each
Mar-07 White Swan 1,939 26,132 1989 Gdansk Lenina
Mar-07 Birte Ritscher 1,452 20,346 1995 Kvaerner Warnow 19.5 Euroseas
Mar-07 West Gate Bridge 2,878 40,928 1986 Kawasaki HI 17.2 Goldenport
Mar-07 CSAV Peru 2,478 33,914 1998 Volkswerft 40.0 Seacastle
Mar-07 Libra Brasil 1,742 30,078 1992 Thyssen 21.2 Virginia Key
Apr-07 Cala Pinar Del Rio 1,354 20,275 1994 Szczecin 27.0 Hansen & Lange
May-07 YM Victory 1,110 19,325 1997 China Shipbuilding 89.0 Arkas Deniz. En bloc, price all
May-07 YM Champion 1,119 19,332 1997 China Shipbuilding
May-07 YM Container 1,119 19,353 1997 China Shipbuilding
May-07 YM Union 1,119 19,338 1997 China Shipbuilding
May-07 Dal East London 2,420 33,745 1994 Gdansk Lenina 36.0 Goldenport
May-07 Mukaddes Kalkavan 1,145 12,123 1997 Sedef Tuzla 20.0 JR Ship Mgmt En bloc, price
each
May-07 Selma Kalkavan 1,145 12,310 1999 Sedef Tuzla 20.0
May-07 Bunga Pelangi Dua 4,469 61,428 1995 Hyundai HI 50.0 MSC
Jun-07 Cosco Charleston 5,100 67,600 2007 Hanjin Pusan 93.0 CMA-CGM En bloc, price
each
Jun-07 Cosco Norfolk 5,100 67,600 2007 Hanjin Pusan 93.0
Jun-07 Beauty River 1,923 33,667 1990 Halla Inchon 18.0 Eurobulk En bloc, price
each. Dely Sep-
Jun-07 Honor River 1,923 33,668 1990 Halla Inchon 18.0
07
Jun-07 Montemar Europa 1,730 22,900 2003 Szczecinska Nowa 31.0 Ship Finance Intl
Jun-07 Nedlloyd Juliana 2,556 34,273 2003 Hyundai HI 44.0 Blue Star En bloc, price
Reederei each
Jun-07 Nedlloyd Adriana 2,556 34,567 2003 Hyundai HI 44.0
Jun-07 Nedlloyd Marita 2,556 32,000 2003 Hyundai HI 44.0
Jun-07 Nedlloyd Valentina 2,556 34,315 2004 Hyundai HI 45.0
Jul-07 Hyundai Sprinter 2,181 24,767 1997 Hyundai HI 150.0 Danaos En bloc, price all
Jul-07 Hyundai Stride 2,181 24,777 1997 Hyundai HI
Jul-07 Wan Hai 251 2,181 24,777 1997 Hyundai HI
Jul-07 Hyundai Future 2,181 24,799 1997 Hyundai HI
Aug-07 Steindeich 1,205 18,355 1996 Stocz. Gdynia 21.5 Marconsult Schiff.
Aug-07 City of Hamburg 2,228 30,400 1990 Hyundai HI 24.0 Marconsult Schiff.
Aug-07 MSC Mara 5,050 68,121 2006 Hanjin Pusan 90.0 Seacastle En bloc, price
each, incl. 4y TC
Aug-07 MSC Benedetta 5,050 67,600 2006 Hanjin Pusan 90.0
back
Aug-07 MSC Debra 5,050 67,600 2006 Hanjin Pusan 90.0
Aug-07 MSC Olga 5,050 67,600 2006 Hanjin Pusan 90.0
Aug-07 Sinar Lombok 1,057 23,724 1989 Naikai Setoda 10.0 Virginia Key
Sep-07 Cap Bonavista 2,442 33,917 1999 Thyssen 64.0 Allseas
Sep-07 Thorkil Maersk 1,106 21,238 1990 Tsuneishi 16.5 Eastwind En bloc, price
each
Sep-07 Torben Maersk 1,106 21,238 1990 Tsuneishi 16.5
Sep-07 Trein Maersk 1,106 21,229 1990 Tsuneishi 16.5
Sep-07 Tobias Maersk 1,106 21,229 1990 Tsuneishi 16.5
Nov-07 Mare Hibernum 1,016 12,571 1995 Szczecin 20.0 Danish KS Inc. TC to May-
10 at $15,000
Nov-07 Emirates Jumeirah 1,048 15,162 1990 J J Sietas 13.5 Phoenix KS
Nov-07 ARA J 1,122 16,833 1998 Peene-Werft 20.4 Scott Shipping
Dec-07 Maersk Rades 1,118 13,760 2005 Jingjiang Traffic 29.2 Asian owner
Dec-07 Fa Mei Shan 1,118 13,760 2005 Jingjiang Traffic 28.5 Hasco
Jan-08 APL Jebel Ali 2,470 33,817 2002 Aker MTW 57.0 All Ocean
Jan-08 Regina Maersk 6,000 84,900 1996 Odense 280.0 Costamare En bloc, price all,
incl. 10y-TCB at
Jan-08 Kirsten Maersk 6,418 90,456 1997 Odense
$35,000
Jan-08 Katrine Maersk 6,418 84,900 1997 Odense
Jan-08 Hyundai Highway 2,181 24,757 1998 Hyundai HI 90.0 Danaos En bloc, price all,
incl. 10y TCB
Jan-08 Hyundai Bridge 2,181 24,772 1998 Hyundai HI
Jan-08 Hyundai Progress 2,181 24,766 1998 Hyundai HI
Jan-08 Vento Di Meltemi 1,022 13,333 1985 Bremer Vulkan 21.2 Dutch
Jan-08 ACX Mimosa 1,551 24,497 1992 Kanasashi Toyo. 21.5 American
Jan-08 CMA-CGM Ipanema 1,730 23,051 2001 Szczecin 33.8 Varship Incl. TC to DAL
to Apr-08 at
$13,000
Feb-08 CMA-CGM Copernic 2,741 37,570 2007 Aker MTW 67.0 Unknown
Feb-08 Cala Palmira 1,132 14,717 1995 Volkswerft 19.5 Unknown Incl. 13m TC
Feb-08 King Anton 2,741 37,800 2008 Aker Ostsee 68.1 STX PanOcean En bloc, price
each
Feb-08 King Attila 2,741 37,570 2007 Aker MTW 68.1
Chartering
chartuk@hsbcshippingservices.com
Chartering
charthk@hsbcshippingservices.com
All enquiries:
shanghairep@hsbcshippingservices.com
www.shippingservices.hsbc.com