Shipping Market Quietly In Danger as Chinese Shadow Banking Shows Vulnerability

chinese yuan money banking finance

*+-Does anyone remember the financial crisis of 2008? Politicians, bankers and corporate executives were playing down the potential of a financial crisis before it occurred… What goes around comes around. Nearly two weeks ago, Premier Li Keqiang of China in reference to the growing default risks developing in the Chinese shadow banking market stated, “It […]

Bulk Carriers Continue to be Built While China Says GDP is “Flexible”

golden shadow bulk carrier

*+-In February 2014, the dry bulk shipping fleet and orderbook continued to grow. Shipowners and investors continued to order larger vessels more than offsetting newbuilding deliveries. The fleet also grew in each of the larger dry bulk shipping sectors as newbuilding deliveries increased substantially and shipowners withheld ships sent to breakers (i.e., scrapping). China, the main economic […]

Reduced Expectations for Dry Bulk Shipping as Harvest Predictions Turn Negative

grain elevators

*+-Dry bulk shipping was relying on a strong grain season in South America. Shipowners, investors and analysts, in particular, may need to reevaluate their expectations and forecasts. On March 12, this past week, Brazil’s government crop supply agency (“CONAB”) slashed its forecast for the 2013/14 soybean harvest by 5% to 85.44 million metric tons (“MMT”). […]

Shipyards Incentivized: Expect Yards to Expand Orderbook and Maintain Production

Chinese Shipyard

*+-Shipowners, investors and analysts, who have been expecting for some time to see the dry bulk orderbook, as well as the overall shipping orderbook, to decline and see less ships delivered, may be waiting quite a while longer. We have said many times that shipyards are not capitalist endeavors, but are socio-economic entities. These enterprises should […]

Overcapacity Builds in the Dry Bulk Sector

Shanghai Waigaoqiao Shipbuilding

*+-The dry bulk shipping market continues to see the fleet and orderbook grow.  In January 2014, the worldwide capacity of dry bulk vessels grew by nearly 8 million deadweight tons (dwt), increasing 1.1% in the first month of 2014. The increase in January of 116 new bulk carriers was spread across all dry bulk sectors – […]

Chinese Growth: An Unstable Financial System Upon Which a Shipping Recovery is Based

china gdp growth

*+-The shipping recovery that is currently be discussed and propounded by analysts, shipowners, private equity investors and bankers is based upon an unstable financial system in China. China’s financial system is under significant stress as a result of excess credit availability and debt held by its banks and corporate entities. Should the People’s Bank of […]

An Alternative View to Morgan Stanley’s Dry Bulk Market Predictions

Shanghai Waigaoqiao Shipbuilding

*+-“Dry bulk recovery on the way: We are upgrading our maritime industries view to “In-Line” from “Cautious” as we see improved market fundamentals entering into 2014. We expect dry bulk to outperform other shipping segments as demand is set to surpass fleet supply growth in 2014 for the first time since 2008. This is driven by i) […]