Dry Bulk Shipping Report 2015-16

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VESSEL VARIATIONS
“Ship demand is determined
by the overall volumes of
cargo moved and the distance
that these are shipped (that is,
tonne mile demand), as well as
changes in vessel efficiency”43
Scorpio Bulkers Inc. 2014 Annual Report
VESSEL TYPES
It is worth noting that income earning
potential for different classes of Dry
Bulk vessels can differ greatly as they
are exposed to differing supply and
demand factors, with more over-supply
being experienced in some types than
others and more or less reliance on
certain commodities which may or may
not be suffering demand dips.
For 2015, Supramax vessels have
achieved the higher earnings within
the sector, with September 2015
seeing Supramax average earnings
for a single voyage of $9,228/day and
tripcharter average earnings at $8,438/
day44 . However, with average running
costs at around $5000 to $6000/day45 ,
that leaves narrow margins to cover
unforeseen costs. It also means that
operators with debt may not have
sufficient margin to cover interest and
fees on the debt.
CHARTER RATES
Whilst the volatility of Dry Bulk charter
rates is clear, this applies differently
“Income earning potential for different classes of Dry Bulk vessels can differ greatly as they are
exposed to differing supply and demand factors”
HANDYMAX SCRAP VALUES VS TIME CHARTER RATES
HISTORIC & FORECAST PERIOD RATES (US$ PER DAY) (2011-2020)
2011
35,000
30,000
25,000
20,000
15,000
10,000
5,000
2012 2013 2014 2015 2016 2017 2018 2019 2020
Handysize Handymax Capesize Panamax
Source: Drewry Maritime Research34
US$ per day
CORRELATION OF SECOND HAND PRICES AND CHARTER RATES (2002-2015)
Source: British Marine
1 Year timecharter rate 52,000 dwt bulkcarrier
Handymax 52k 10 year old second hand prices
Handymax 45-48k dwt 15 year old second hand prices
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
70
60
50
40
30
20
10
0
2002 - Jan 2007 - Jan 2012 - Jun 2003 - Sep 2009 - Feb 2014 - Feb 2005 - May 2010 - Oct 2002 - Nov 2008 - Apr 2013 - Apr 2004 - Jul 2009 - Dec 2014 - Dec 2006 - Mar 2011 - Aug 2002 - Jun 2007 - Jun 2012 - Nov 2004 - Feb 2009 - Jul 2014 - Jul 2005 - Oct 2011 - Mar 2003 - Apr 2008 - Sep 2013 - Sep 2004 - Dec 2010 - May 2015 - May 2006 - Aug 2012 - Jan
Timecharter Rate ($/day)
Second hand prices (US$m)
80 8
2002 Jan2002 Jul2003 Jan2003 Jul2004 Jan2004 Jul2005 Jan2005 Jul2006 Jan2006 Jul2007 Jan2007 Jul2008 Jan2008 Jul2009 Jan2009 Jul2010 Jan2010 Jul2011 Jan2011 Jul2012 Jan2012 Jul2013 Jan2013 Jul2014 Jan2014 Jul2015 Jan2015 Jul
70 7
60 6
50 5
40 4
30 3
20 2
10 1
0 0
Charter Rate per day (US$ Millions)
Scrap Values (US$ Millions)
1 year Time Charter rate Handymax Bulker Scrap Value
Source: Drewry9