Cemtech Dubai

Dry bulk freight market & cement trading: trends and

outlook
7 March 2011
Joel Grau
Ship broker

Freight is in a declining trend

Baltic Dry Index (BDI) since 2000

The average of the BDI over the past

Average = 5679

12,000
11,000

10,000
9,000
8,000

Average = 3512

6,000

Average = 2635

5,000
4,000 Average = 1322
3,000

11-year
Average
= 3329

2,000
1,000
0
2000-01
2000-07
2001-01
2001-07
2002-01
2002-07
2003-01
2003-07
2004-01
2004-07
2005-01
2005-07
2006-01
2006-07
2007-01
2007-07
2008-01
2008-07
2009-01
2009-07
2010-01
2010-07
2011-01

BDI

7,000

decade has been 3329, which was

pulled by the unprecedented freight
boom of 07 and 08.
The freight boom was a result of the
continuous robust seaborne demand
growth and a lack of ship output to
meet that demand.
2008 witnessed the peak and trough of
the BDI. The trough was caused by the
world financial crisis which halted raw
materials demand.
Since the advent of Chinas
industrialisation and huge demand for
raw materials, freight volatility has
increased.
The 2010 BDI average = 2761
The 2011 BDI average to date =1282

www.clarksons.com

with spot freight rates down from last year

2007
$120,000
$110,000

2008

2009

2010

2011

$116,049
$106,021

$100,000
$90,000

$/day

$80,000
$70,000
$56,816

$60,000
$50,000
$40,000

$49,019

$47,449
$41,574

$42,656
$33,298

$25,041
$19,296

$30,000
$20,000
$10,000

$22,456
$17,338

$13,604

$32,447
$29,282

$13,411

$8,046

$16,428
$11,342
$10,457

$0

2010 year-on-year change

Capesize
-22%

Panamax
+30%

Supramax
+30%

Handysize
+45%

www.clarksons.com

Cement only constitutes 3% of drybulk seaborne

trade
Drycargo seaborne trade commodities

Coal
30%

Grains
11%

Steel
7%

Fertilisers
2%

Total drycargo seaborne trade

is more than 3 billion tonnes
Cement constitutes
approximately 3% of total
drycargo seaborne trade

Other ores
4%
Forest
products
4%

Metal and ore

products
5%
Iron ore
34%

Cement
3%

www.clarksons.com

but is a more important commodity for the smaller

ships
Smaller ship type commodities Handy/Supramax
and Handysize

Handysize:
10,000 40,000 dwt

Iron ore
5%

Metal and ore

products
8%

Coal
20%

Forest products
9%

Handy/Supramax:
40,000 60,000 dwt

Other ores
10%

Fertilisers
5%

Grains
19%

Steel
16%

The vessel types used for

shipments are subject to load and
discharger port restrictions and
port facilities

Cargo volumes required/lot size

Cargo restrictions or requirements

Cement
8%
www.clarksons.com

Drybulk fleet profiles

Handy/Supramax Fleet Profile

Handysize Fleet Profile

On Order

Fleet

550

500

500

450

450

400

400

200

2014

2011

2008

2005

2002

1999

2014

2011

2008

2005

2002

1999

1996

1993

1990

1987

1984

50

0
1981

100

50

1996

150

100

1993

150

250

1990

200

300

1987

250

On Order

350

1984

300

1981

350

<= 1978

Number of vessels

550

<= 1978

Number of vessels

Fleet

www.clarksons.com

Supra/Handymax and Handysize fleet profile

M Dwt

No of
ships

HANDYSIZE

M Dwt

No of
ships

Fleet on 1 Jan 2011

109.0

2,164

Fleet on 1 Jan 2011

82.1

3,026

Orderbook on 1 Jan 2011

% of Fleet

53.8
49%

834
39%

Orderbook on 1 Jan 2011

% of Fleet

26.8
33%

827
27%

Orderbook for delivery

2011

23

411

Orderbook for delivery

2011

16

506

Recorded deliveries in
Jan/Feb

2.6

46

Recorded deliveries in
Jan/Feb

1.2

36

Net fleet growth 2010

18.5%
17.0

16.0%
299

Net fleet growth 2010

8.0%
6.1

6.6%
186

Net fleet growth 2011

(forecast)

15.1%
16.4

14.3%
309

Net fleet growth 2011

(forecast)

6.6%
5.4

4.5%
135

SUPRA/HANDYMAX

www.clarksons.com

Drybulk fleet age profile

Age categories of ships
0-5

6-10

11-15

16-20

21-25

Potential scrap pool (Based on special

surveys)
26-30

31-35

35+

100%
90%

Cape
size
5th,6th

80%
70%

Pana
max
6th,7th,8th

Handy/
Supra
max
6th,7th,8th

Handy
size
6th,
7th,8th,9th

40

15

143

60%
50%

2011

40%

38

30%
20%
10%
H andysize

H andymax

Panam ax

C apesize

0%

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Drybulk demolitions are likely to be high in 2011

Monthly Drybulk Demolitions
Capesize

Panamax

Handy/Supramax

Handysize

70

Number of Ships

60
50
40
30
20
10

2008-09
2008-10
2008-11
2008-12
2009-01
2009-02
2009-03
2009-04
2009-05
2009-06
2009-07
2009-08
2009-09
2009-10
2009-11
2009-12
2010-01
2010-02
2010-03
2010-04
2010-05
2010-06
2010-07
2010-08
2010-09
2010-10
2010-11
2010-12
2011-01
2011-02

www.clarksons.com

Drybulk seaborne trade continues to grow

Drybulk seaborne trade
Iron ore

Coal

Agriculture related

Construction related
1,082

1,100

1,021

1,000

1,006

Smaller
ship sizes

949
909

Million tonnes

900

+10.6%

828

+4.5%

800
700
600
500

657
620

594

530

518
471

623

651

542

452

400
300
2003

2009

2010

2011f

www.clarksons.com

Drybulk demand and supply balance

Trade (Mt)

Trade growth

Required dwt growth

4,000
3,800

18%
16%

16%

3,600

14%

3,400

14%

14%

13%

12%

12%
10%

3,200

10%
9%

8%

3,000

10%

10%

9%

9%

8%
7%

2,800

7%

7%
6%
6%

7%

7%

7%

6%

5%

2,600

7%
6%

5%

3%

8%
6%
4%

3%

2%

2,400

6%

% y-o-y growth

Trade in Million tonnes

Net fleet growth

17%

2%

2%

2,200

0%
-2%

2,000
2003

2004

2005

2006

2007

2008

2009

-2%
2010(e)

2011 (f)

2012 (f)

2013 (f)

www.clarksons.com

Conclusion
Cement seaborne trade constitutes about 3% of total drybulk seaborne trade but
about 8% for the smaller ship sizes.

The strong fleet growth will continue during 2011 which will put freight rates under
pressure.

Demolitions are likely to be high, especially for the ageing Handysize sector. Net
fleet growth for the Handysize segment is therefore likely to be the lowest of all
the sectors.

Demand for drybulk commodities are expected to be strong and grow by 5% this
year.

www.clarksons.com

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