Is marine industry facing a downfall ?

[IndianMariner]

<span style="font-style: italic;].<br>.<br>.<br>Last year stats said that organisations running the containers have met with a serious loss b'coz of hike in oil prize....Is this a sign of declination of maritime era...........Post ur comments about the future of marine industries.........</span>

[BigYacht]

I don't think this could be farther from the truth. <br><br>From what I have seen and read, ships a being build left and right. <br><br>AND since everything is being build in China these days the shipping industry is only going to become a larger player in the worlds Economy.<br><br><br>IMO

[Tim]

Downfall?

No F@#$ing way, maritime company's are killing it right now!

[TheGreenHorn]

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Demand surge sees shipping industry sail into profits <br><br>By

Darren Stubing
on <span id="date]Sunday, May 25, 2008</span>
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On
the back of the commodity surge and huge demand from major markets such
as China for resources and materials, the shipping industry is enjoying
a successful period with shipping rates rising increasingly higher. <br><br>Capesize
[vessels with more than 80,000 deadweight with carrying capacity of
about 180,00 tonnes and so named because they are too big to go through
the Panama Canal] rates are pushing the dry bulk market upwards and the
sector is anticipating the larger carriers could fetch as much as
$300,000 (Dh1.1 million) per day within the next week.<br><br>Record
high Capesize rates are being paid for front haul voyages from Brazil
to China, at nearly $281,000 per day. The Baltic Dry Index, the
benchmark for commodity shipping rates, is up by 72 per cent from a
year ago, advancing to a record for the third consecutive day, reaching
11,709 points.<br><br>The charter rate for the largest iron-ore
carrying ship rose to a record $211,640 a day on May 16, according to
London-based Baltic Exchange Limited.<br><br>The average daily cost was
$84,000 in January after Brazilian miner Vale allowed rates to drop.
Before the commodities boom began six years ago, Capesize chartering
rates languished at $17,000 per day. Other main shipping indices, such
as Panamax and Supramax, charter rates have also hit record levels this
year. <br><br>The demand for dry bulk carrier capacity is determined
by the underlying demand for commodities transported in dry bulk
carriers, which in turn is influenced by trends in the global economy.
Seaborne dry bulk trade increased by just above two per cent on an
average annual basis during the 1980s and 1990s.<br><br>However, this rate of growth has increased dramatically in recent years. <br><br>Generally,
growth in gross domestic product and industrial production correlates
with peaks in demand for seaborne transportation. Certain economies
will act from time to time as the primary driver of the dry bulk
carrier market. In the 1990s, Japan acted as the primary driver due to
increased demand for seaborne trade and growth in Japanese industrial
production.<br><br>China has been the main driving force behind the
recent increase in seaborne dry bulk trades and the demand for dry bulk
carriers. <br><br>Ship owners can virtually name their price and it
gets accepted and then the next owner names their price, but only
higher. Market rumours reported by the Baltic Exchange in London on May
16 of a $300,000 per day capesize fixture remained unconfirmed. But
most brokers told Lloyd's List the frenzied chartering action of the
past week meant these kinds of numbers could be seen in the near
future. <br><br>The strongest rates of growth have been in the Pacific
market, after rates increased earlier this month in the Atlantic. Spot
freight rates to carry iron ore from Western Australia to China have
risen nearly 25 per cent since May 12. Rates from Brazil to China have
risen around 14 per cent by comparison. Delays at Asian shipyards, such
as South Korea, delivering new capesize vessels into market has
exacerbated tonnage shortfalls. <br><br>China's unprecedented demand
for iron ore and coal, fuelled by rising steel prices, is cited for
rising numbers of shipments, along with seasonal peaks in grain exports
from the United States and South America.<br><br>Actions by BHP
Billiton have also aided in pushing up ship charter rates to new
records. BHP Billiton moved to exploit the Chinese boycott of its rival
Rio Tinto on spot iron ore markets by chartering a large number of bulk
carrier ships. BHP is known to have recently booked 17 Capesize bulk
carriers to carry ore between the Western Australia and China. The big
miners usually charter about nine Capesize vessels each month but
demand in April was huge, with BHP Billiton chartering 13 and Rio 16. <br><br>Regarded as a bellwether for global mining and metals demand, the Baltic Dry Index is expected to continue setting new records.<br><br>Heading
the rally are Asian steel mills, which increased iron ore shipments
this month from Australia and Brazil, ahead of anticipated price
increase. <br><br>China's monthly iron ore imports peaked at 42
million tonnes in April, more than five million tonnes above the
previous record. China has assembled a 62 million tonne stockpile. It
normally stands at 40 million tonnes. <br><br>Asian steel mills are
now paying $107 a tonne in transportation costs from Brazil, more than
double the price of late January. The price for iron ore transport from
Australia to China is $43 a tonne, compared with $20 a tonne a year
ago.Increasing congestion at Australian export terminals has also added
to pressure on the ship sector already struggling to cope with booming
demand for coal, grain and other commodities. Nearly 17 per cent of the
750-strong global fleet of Capesizes was delayed at ports over the
weekend. <br><br>China is also expected to transport extra coal for
its coal-fired plants, to combat power gaps created by earthquake
damage to hydroelectricity systems.<br><br>Demand for cement is also underpinning shipping rates. Prices of the ships themselves have also skyrocketed. <br><br>Demand has been so high that prices for some dry bulk ships have risen 50 per cent in the past four months. <br><br>Despite
the high ship building prices, it is estimated returns on long-term
charters are at around 14 per cent to 15 per cent. Customers are
willing to sign a multi-year charter and guaranteed revenue is an
easier way to get bank financing. <br><br>Banks' ship financing
divisions are also enjoying a strong period. As was the case in 2007,
growth in 2008 is expected to be underpinned by business with Asia,
mainly China and India.<br><br>Year 2007 was a record year for the dry cargo shipping industry.<br><br>Charter rates, ship values, ship new building prices and shipyards' order books all set new records.<br><br>The medium-term outlook for the offshore drilling market is also positive.<br><br>Demand
for mobile oil rigs and drilling ships has risen steadily over the past
two years as a result of persistently high oil prices.
<br>
<strong>The numbers </strong>
$300,000: Larger carriers could fetch up to $300,000 per day
44m: China's monthly iron ore imports peaked at 44m tonnes in April, a rise of five million
$281,000: Is being paid for front haul voyages from Brazil to China
15%: Up to 15 per cent return is estimated on long-term charters despite the high ship building prices