Dry Bulk Shipping Report 2015-16

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OPERATING EXPENSES
Operating expenses (OPEX) are
remarkably stable within the Dry Bulk
shipping sector. Year on year, opex
actually decreased by 0.6% to October
2015 and in the years from 2000 to 2014
it increased at a relatively low average
of 3.9% per year47. Moreover, predicted
increases over the four years following
2015 are not substantial.
The highest proportion of OPEX is
made up of crew costs, which account
for almost 50%, almost four times as
much as repairs and maintenance.
The opex elements are crew, (around
48%), administration (around 16%),
repairs and maintenance (around 13%),
insurance (around 13%) and stores
(around 10%). These vary by ship type48 .
The price of fuel is only for the account
of the ship owner under certain charter
types, with those who choose to charter
their vessels under a time charter
generally passing responsibility for the
cost of bunkers (fuel in shipping terms)
to the charterer.
SHORT-TERM OUTLOOK
In September 2015 Bimco49 viewed
charter rate increases from July and
August as being of major assistance
to dry bulk carriers, allowing them
to achieve the break-even point
and providing breathing room for
companies with large newbuilding
acquisition programmes. For some
time before this, those companies
had been operating their vessels at
a loss. Consequently, in such a harsh
trading environment, Bimco’s cautious
prediction for a return to profit is 2017.
Nevertheless, the cycle is so sensitively
balanced that even a suggestion of
recovery could have detrimental effects
by deincentivising ongoing scrappage,
jeopardising the reduction in vessel
over-supply and thereby delaying a
more pronounced upturn.
Drewry shares the forecast of 2017
as the year of recovery, stating in
September 2015 that, “The Dry Bulk
shipping market will remain in recession
2015
OPERATING
COSTS (US$PD)
$4,990 $5,460 $6,390 $6,670 $7,270 $8,160
HANDYSIZE SUPRAMAX PANAMAX POST PANAMAX CAPESIZE VLOC
Million US$
Source: Drewry Maritime Research34
HISTORIC & PROJECTED OPERATING COSTS (US$ PER DAY)
2013 2014 2015 2016 2017 2018 2019
HANDYSIZE
(26-28,000 dwt)
4,880 4,920 4,990 5,080 5,190 5,290 5,390
SUPRAMAX
(55,000 dwt)
5,380 5,410 5,460 5,570 5,680 5,800 5,870
PANAMAX
(65-73,000 dwt)
6,270 6,300 6,390 6,500 6.630 6,750 6,870
P.OST
PANAMAX
(95,000 dwt)
6,550 6,570 6.670 6,780 6,930 7,060 7,170
CAPESIZE
(140-160,000dwt)
7,060 7,180 7,270 7,400 7,560 7,690 7,810
VLOC
(220,000 dwt)
7,950 8,050 8,160 8,300 8,490 8,630 8,790
Source: Drewry9
Source: Drewry9
HANDYMAX NEW AND 5 YEAR SECOND HAND PRICES (US$)
HANDYMAX SECOND HAND PRICES (US$) (2001-2015)
2001 Nov2002 Mar2002 Jul2002 Nov2003 Nov2003 Jul2003 Nov2004 Nov2004 Jul2004 Nov2005 Mar2005 Jul2005 Nov2006 Mar2006 Jul2006 Nov2007 Mar2007 Jul2007 Nov2008 Mar2008 Jul2008 Nov2009 Mar2009 Jul2009 Novl2010 Mar2010 Jul2010 Nov2011 Mar2011 Jul2011 Nov2012 Mar2012 Jul2012 Nov2013 Mar2013 Jul2013 Nov2014 Mar2014 Jul2014 Nov2015 Mar
Handymax 52K 10 year old second hand
Handymax new Handymax second hand 5 years
Handymax 45-48K dwt 15 year old second hand
Million US$
0
10
20
30
40
50
60
70
Jan 96Apr 97Jul 98 Oct 99Jan 01Apr 02Jun 03Oct 04Jan 06Apr 07Jul 08 Oct 09Jan 11 Apr 12Jul 13 Oct 14
0
10
20
30
40
50
60
70
80