Statistical Publications

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Shipping Statisticsand Market Review

Market ReviewAnalytical Focus

Volume 55 No 4 - 2011

World Merchant Fleet

World Bulk Carrier MarketWorld Tanker Market

World Container and General Cargo ShippingWorld Merchant Fleet by Ownership PatternsWorld Passenger and Cruise Shipping/ISL Cruise Fleet RegisterWorld Shipbuilding and ShipbuildersMajor Shipping NationsWorld Seaborne Trade and World Port Traffic

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Shipping Statistics and Market Review

Institute of Shipping Economics and Logistics

World Bulk Carrier Market

ISL Comment ........................................................... 5

ISL InfoLine Special .................................................

ISL Statistical Tables ................................................

Market Review

Economic Indicators .................................................

World Merchant Fleet ..................................................

Freight and Charter Market .......................................

Shipping Prices and Costs .........................................

World Shipbuilding ...................................................

World Port Traffic .....................................................

15

19

45

48

51

63

64

66

Volume 55 (2011) ISSN 0947 - 0220

published 9 times per year

Analytical Focus

(double issues Jan./Feb., May/ June. and Sept./ Oct.)

No 4 - 2011

Abbreviations/Symbols www.isl.org

2 SSMR April 2011

Abbreviations ARA Antwerp/Rotterdam/Amsterdam range

AWES Association of West European Shipbuilders

b/d Barrels per day

BHP Brake horsepower

cgt Compensated gross tonnage

cif Cost, insurance, freight

CIS Commonwealth of Independent States

COD Country of Domicile

CPE Centrally-planned Economies

CPI Consumer price index

cST Centi Stokes

cu.m Cubic metres (also m3)

DB Double bottom

DC Developing Countries

DH Double hull

DIS Danish International Ship Register

DME Developed market economies

DS Double sides

dwt Deadweight tons

d/y Day/year

ECB European Central Bank

EMEs Emerging Market Economies

EU European Union

FY Fiscal year

FAO Food and Agriculture Organization of the United Nations

fio Free in and out

fob Free on board

FT Freight tons

ft Foot

GATT General Agreement on Tariffs and Trade

gt Gross tonnage

HP Horsepower

HT Harbour ton

ibf Intermediate bunker fuel

IEA International Energy Agency

IMF International Monetary Fund

IMO International Maritime Organization

in. Inch

ITF International Transport Workers Federation

km Kilometre

loa Length overall

lbs Pounds

LDT Light displacement tons

LDC Less Developed Countries

LNG Liquefied Natural Gas

LPG Liquefied Petroleum Gas

LR/Fairplay Lloyd’s Register - Fairplay

LT Long ton

m Metre

mbd Million barrel per day

mdo Marine diesel oil

MED Mediterranean

MfA Marine fishing area

mill Million

M/T Motor tanker

MT Metric tons

mtd per ton fob delivered

mth Month

mtw Per ton ex wharf

n.a. Not available

NDRF National Defence Reserve Fleet

n.e.c. Not elsewhere classified

neg. Negligible

NIS Norwegian International Ship Register

no Number

NODC Non-oil Producing Developing Countries

nrt Net register tonnage

nt Net tonnage

NWE,NW Northwest Europe

o.a. Over all

OBO Ore/bulk/oil carrier

OECD Organization for Economic Cooperation and Development

O/O Ore/oil carrier

OPEC Organization of Petroleum Exporting Countries

OR Ordinary Register

P/C Products carrier

Pr/OBO Product/ore-bulk-oil carrier

r Revised

Ro/ro Roll-on/roll-off

RT Revenue ton

SAR Special administration region

SBT Ship segregated ballast tanks

SDR Special drawing rights

SSMR ISL Shipping Statistics and Market Review

ST Short ton

t Ton/tonne

TB Tug/barge

TEU Twenty feet equivalent unit

TKB Tanker barge

T/S Tanker/steam

T/T Tanker/turbine

ULCC Ultra large crude carrier

USAC United States Atlantic Coast

USD US Dollar

VLCC Very large crude carrier

WS Worldscale

WTO World Trade Organization

YR, YRS Year, Years

Symbols ... Data not available

- Nil

0/0.0 Less than half of unit employed

1995-2004 From 1995 to 2004 inclusive

2002/03 Crop year, fiscal year etc., beginning

in 2002 and terminating in 2003

Billions means a thousand million

Detailed items in tables do not necessarily add to totals because of rounding

For further explanation (e.g. Glossary) please visit: www.isl.org/infoline

Contents – Comment and Statistical Tables www.isl.org

SSMR April 2011 3

Page

ISL Comment – World Bulk Carrier Market

(1) WORLD BULK CARRIER FLEET 1.1 Bulk Carrier Fleet Development ............................................................................... 5 1.2 Age Profile of the World Bulk Carrier Fleet ................................................................. 5 1.3 Size Dimensions of the World Bulk Carrier Fleet ......................................................... 6 1.4 Ownership Patterns of the World Bulk Carrier Fleet ..................................................... 7

(2) FUNDAMENTALS OF THE BULK CARRIER MARKET 2.1 Major Dry Bulk Commodities – Production, Consumption and Trade Patterns .................. 8 2.2 Global Insight – Major Bulk Commodities Outlook Until 2013 ........................................ 9 2.3 Seaborne Bulk Trade Development .......................................................................... 10 2.4 Dry Bulk Port Traffic – Regional Highlights 2011 ......................................................... 10 2.5 Dry Bulk Market – Freight Rates and Prices ............................................................... 12

(3) FUTURE BULK CARRIER TONNAGE SUPPLY 3 Future Bulk Carrier Tonnage Supply ......................................................................... 13

(4) THE SHIPBUILDING MARKET FOR BULK CARRIERS 4.1 New Orders and Order Book Development ................................................................. 14 4.2 Leading Shipbuilding Countries ................................................................................ 15

SUMMARY TABLES - COMMENT

Tab. 1 World Bulk Carrier Fleet by Type 2007 and 2011 ........................................................ 5 Tab. 2 World Bulk Carrier Fleet – Tonnage Reductions by Type 2005 – 2010 ............................ 5 Tab. 3 World Bulk Carrier Fleet – Additions (Newbuildings) by Type 2007-2010 ........................ 6 Tab. 4 World Bulk Carrier Fleet and Order Book by Size 2011 ................................................ 6 Tab. 5 Largest Bulk Carriers by Type 2011 ......................................................................... 6 Tab. 6 World Bulk Carrier Fleet – Top Registered Flags 2007 and 2011 .................................... 7 Tab. 7 World Bulk Carrier Tonnage Registered for Panama and Hong Kong According to Countries of

Domicile 2007, 2010 and 2011 ................................................................................ 7 Tab. 8 World Bulk Carrier Fleet – Controlled Tonnage of Major Shipping Nations 2007-2011 ....... 8 Tab. 9 World Seaborne Foreign Trade by Major Bulk Commodities and Regions 2003 – 2008

and Outlook 2013 .................................................................................................. 10 Tab. 10 World Seaborne Dry Bulk Trade by Major Commodities 2009 and

Average Growth Rates 1993-2009 ............................................................................ 10 Tab. 11 Dry Bulk Traffic of Major Ports by Exporting and Importing Areas 2000-2010 .................. 11 Tab. 12 Total Coal and Iron Ore Trade in the World’s Largest Dry Bulk Ports by Port

Regions 2005-2010 .................................................................................................. 12 Tab. 13 Coal and Iron Ore Imports of Major European Ports 2005-2010 .................................... 12 Tab. 14 Rate Level for Benchmark Bulk Carrier Trades 12/2008-12/2010 and 04/2011 ............... 13 Tab. 15 Demolition and Contracting Prices of Capesize Bulk Carriers 1999 - 2010 ....................... 13 Tab. 16 World Bulk Carrier Order Book by Type 2007 – 2011 ................................................... 14 Tab. 17 World Bulk Carrier Order Book by Major Countries of Build 2007 and 2011 ..................... 15 Tab. 18 Bulk Carrier Order Book - Delivery Schedule by Major Countries of Build 2010 ................ 15

FIGURES - COMMENT

Fig. 1 World Bulk Carrier Fleet – Annual Tonnage Changes 1992- 2011 .................................. 5 Fig. 2 World Bulk Carrier Fleet – Tonnage Additions and Reductions 1995 – 2010 .................... 5 Fig. 3 World Bulk Carrier Fleet – Size Development 1992 – 2011 ........................................... 6 Fig. 4 Bulk Carrier Fleet - Tonnage Development of Major Shipping Nations 2007-2011 ............ 8 Fig. 5 World Steel Production by Area 1997-2010 ................................................................ 8 Fig. 6 Overview on Major Commodity Markets 2000-2009 .................................................... 9 Fig. 7 World Seaborne Trade of Major Dry Bulk Commodities 1980 – 2010 .............................. 10 Fig. 8 World Seaborne Trade of Iron Ore and Coal by Major Regions/Countries 2003-2009 ........ 11 Fig. 9 Total Coal and Iron Ore Trade in the World’s largest Dry Bulk Ports

by Port Regions 2005-2010 ..................................................................................... 12 Fig. 10 Development of Dry Bulk Voyage Rates on the Tubarao to China Trade

January 2003 – March 2011 .................................................................................... 13 Fig. 11 Monthly Development of Bulk Indices 2003-2011 ....................................................... 13 Fig. 12 World Bulk Carrier Fleet - Share of the Ordered Tonnage on the Existing Fleet 1999-2011 14 Fig. 13 Bulk Carrier Fleet - New Orders and Broken-up Tonnage, Quarterly 2002 – 2011 ............ 14 Fig. 14 World Bulk Carrier Order Book, Quarterly 2003 – 2011 ............................................... 14

ISL InfoLine Special – World Bulk Carrier Market

15-18

5-14

4 SSMR April 2011

ISL Statistical Tables– World Bulk Carrier Market

(1) TOTAL BULK CARRIER FLEET

1.1 Key Figures on World Bulk Carrier Fleet by Type and Size Class 2011 ............................ 19 1.2 World Bulk Carrier Fleet Development by Type 2007 - 2011 ......................................... 20 1.3 Total Bulk Carrier Fleet by Ownership Patterns ..................................................... 21 1.3.1 Total Bulk Carrier Fleet by Major Flags 2010 and 2011 ................................................ 21 1.3.2 Total Bulk Carrier Fleet by Country of Domicile 2011 ................................................... 22 1.3.3 Total Bulk Carrier Fleet by Registered Flag and Country of Domicile

According to Country Groups and Type 2007 and 2011 ................................................ 23 1.3.4 Total Bulk Carrier Fleet by Registered Flag and Country of Domicile

According to Regions and Type 2007 and 2011 .......................................................... 24 1.3.5 Total Bulk Carriers by Country Groups and Division of Age 2011 ................................... 25 1.3.6 Total Bulk Carriers Additions to Fleet by Top Countries of Domicile During 2007 - 2010 .... 25 1.3.7 Total Bulk Carriers by Size Class and Division of Age and Deliveries up to 2011 .............. 26 1.3.8 Total Bulk Carriers Fleet - Size Dimensions 2011 ........................................................ 26 1.4 Broken-up Bulk Carriers ........................................................................................ 27 1.4.1 Broken-up Bulk Carriers by Type January 1999 - December 2010 ................................. 27 1.4.2 Broken-up Bulk Carriers by Major Flags 1999 - 2010 ................................................... 27 1.4.3 Broken-up Bulk Carriers by Size Class 1999 - 2010 ..................................................... 27

(2) BULK MARKET - SHIPPING COSTS AND PRICES

2.1 Second Hand Prices of Bulk Carriers, Average Values 2000 - 2010 ................................ 28 2.2 Contracting Prices for Newbuildings 2000 - 2010 ........................................................ 28 2.3 Demolition prices 2000 - 2010 ................................................................................. 28

(3) BULK MARKET - COMMODITIES, SEABORNE TRADE, PORTS

COMMODITIES 3.1 Coal Production and Consumption ......................................................................... 29 3.1.1 World Coal Production by Country 2000 - 2009 .......................................................... 29 3.1.2 World Coal Consumption by Country 2000- 2009 ........................................................ 30 3.2 World Iron and Steel Production ........................................................................... 31 3.2.1 World Pig Iron Production by Selected Countries 1990, 2004 - 2009 .............................. 31 3.2.2 World Crude Steel Production by Country 2000 - 2009 ................................................ 32 3.3 World Total Grain Production and Trade ............................................................... 33 3.3.1 Production of Grain by Region and Selected Countries 2002 - 2009 ............................... 34 3.3.2 Import of Grain by Region and Selected Countries 2002/2004-2006/2009 and

Forecast for 2009/2010 .......................................................................................... 34 3.3.3 Export of Grain by Region and Selected Countries 2002/2004-2006/2009 and

Forecast for 2009/2010 .......................................................................................... 34

SEABORNE TRADE 3.4 Seaborne Coal Trade ............................................................................................. 35 3.5 Seaborne Iron Ore Trade ....................................................................................... 35 3.6 Seaborne Grain Trade ............................................................................................ 35

PORTS 3.7 World Dry Bulk Ports ............................................................................................. 36 3.7.1 Selected Major World Coal Ports - Traffic 2005 - 2010 ................................................. 36 3.7.2 Selected Major World Iron Ore Ports - Traffic 2005 - 2010 ........................................... 37

(4) FUTURE BULK CARRIER TONNAGE SUPPLY- WORLD BULK CARRIER ORDER BOOK

4.1 Existing World Bulk Carrier Fleet by Type and Major Areas of Build 2011 ........................ 38 4.2 Bulk Carrier Order Book and New Orders by Type 2006 – 2011 .................................... 39 4.3 Order Book by Major Countries of Build and Type 2011 ............................................... 39 4.4 Bulk Carriers on Order by Type and Delivery Schedule 2011 ....................................... 40 4.5 Bulk Carriers on Order by Countries of Build and Delivery Schedule 2011 ....................... 40 4.6 Bulk Carriers on Order by Ship Yard and Delivery Schedule 2011 .................................. 40 4.7 Additions to the Bulk Carrier Order Book by Type and

Major Countries of Build 2005 - 2010 ....................................................................... 41 4.8 Additions to the Bulk Carrier Order Book by Type and

Major Countries of Domicile 2005 - 2010 ................................................................... 42

19-42

Comment - World bulk carrier fleet

SSMR April 2011

www.isl.org

1

This “short comment” is an excerpt from the “Analytical Comment” published in the ISL Shipping Statistics and Market Review (SSMR) No 4 2011. The SSMR includes detailed statistical information concerning the “analytical focus” and provides approx. 30 monthly/quarterly market indicators (Market Review). For more information compare attached “contents”

If you are interested in the complete publication covering all details (tables & figures), please contact our subscription department subscription@isl.org or you can order it via our webshop www.isl.org/shop All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, photocopying, recording or otherwise, without prior permission of the editors. ISL does not guarantee the accuracy of the information contained in "ISL Shipping Statistics and Market Review (SSMR)" (this is also true for the “Short Comment”) nor does it accept responsibility for errors or omissions or their consequences.

Comment - World bulk carrier fleet

SSMR April 2011

www.isl.org

5

1 WORLD BULK CARRIER FLEET 2010/2011

The year 2010 turned out to be rather disappointing for bulk carrier operators. While rate levels increased during the course of 2009 to reach reasonable levels towards the end of the year, the increase of capacity in 2010 was too strong to be covered by demand growth, leading to decline of rates. In early 2011, we see a huge oversupply of vessels in the bulk carrier segment. The future supply/demand balance in the bulk market is determined by a surprisingly high contracting of newbuildings and a moderate volume of broken up tonnage. In 2010, at least 93 million dwt were reported as new bulker orders. At the same time a total of 79 million dwt were delivered equal to a fleet increase of “historical” 17 per cent, while only 148 bulk carriers with 6.4 million dwt were reported as demolitions. Part of the high ordering activity in 2010 most likely goes back to orders that had been cancelled after the crisis. These cancellations amounted to 70 million dwt. At the beginning of 2011, the resulting bulk carrier order book reached 253 million dwt and represents about 48 per cent of the fleet. Most of these vessels are due for delivery in the next two years. The current overcapacity and the strong fleet growth that can be expected during the next years make it highly unlikely that rates will recover quickly.

1.1 Bulk carrier fleet development

With an increase of 17 per cent in 2010, the total bulk carrier fleet showed the highest growth ever. At the end of 2010, the total bulk carrier fleet was composed of 8,652 vessels with a capacity of 528 million dwt. At the beginning of 2011, the following “Special types”, namely sub-types specified by IHS Fairplay, can be distinguished: There have been massive deliveries in 2010. Compared with 2009 figures, the total world bulk fleet increased by about 77 million dwt to 528 million dwt. Thus, the bulk carrier fleet continued its extraordinary growth path since 2004. Fleet development trends can be summarised as follows: Deliveries of new bulk tonnage amounted to

historical 78.7 million dwt during 2010, the biggest delivery year ever. For comparison: The average volume of deliveries in the last decade amounted to 21 million dwt per year.

The average ship size of the new deliveries in 2010 was about 80,000 dwt.

Over the last 12 months, the capesize fleet (over 80,000 dwt) has increased by at least 26 per cent in dwt, whereas the Panamax fleet (60-80,000 dwt) increased by only 4.1 per cent and the Handy Bulker fleet (10-40,000 dwt) by 6.4 per cent.

During 2010, a further five million dwt of oil tanker tonnage were converted to bulk carriers.

Fig. 1: World bulk carrier fleet – annual tonnage changes as of January 1st, 1992-2011 (dwt- per cent)

Tab. 1: World bulk carrier fleet by type as of January 1st, 2007 and 2011

Tab. 2: World bulk carrier fleet – tonnage reductions by type 2006-2010

Tab. 3: World bulk carrier fleet – additions (newbuildings) by type 2006-

2010

Fig. 2: World bulk carrier fleet – size development as of January 1st,

1990-2009 (average dwt)

Sources: If not otherwise mentioned, the source for tables and figures concerning the world merchant fleet and order book information is “ISL based on IHS Fairplay”, please quote accordingly. In general merchant fleet data refer to ships of 300 gt and over. Explanatory notes: The “total bulk carrier fleet” includes Bulk carriers and Ore/Bulk/Oil carriers (OBOs). Bulk carriers: include – Bulk carriers, ore carriers and other bulk carriers like: Aggregates carriers, Cement carriers, Wood chip carriers, Urea carriers, Limestone carriers Alumina carriers, Refined sugar carriers, Powder carriers. OBO carriers include Bulk/oil carriers and Ore/oil carriers.

Fig. 3: Bulk carrier fleet – tonnage development of major shipping

-2.00.02.04.06.08.0

10.012.014.016.018.0

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

1.7

-1.3

0.4

3.14.7

3.4 3.7

-1.6

0.0

2.4

4.7

2.0 1.6

5.87.1 6.4 6.3 7.2

8.9

17.0

2007mill mill

Ship type No dwt No dwt No dwt 2007 2011

Bulk carriers 5758 345.1 7317 474.5 6.2 8.3 59.9 64.9Other bulk carrier 1023 12.5 1264 49.5 5.4 41.1 12.2 39.2OBO carriers 106 6.1 71 4.1 -9.5 -9.3 57.3 58.1Total 6887 364 8652 528 5.9 9.8 52.8 61.0

2011 Av. growth rate '07-'11

Average size(1000 dwt)

2009 2010 dwt-%No mill dwt-% No of mill dwt-% No mill dwt-% change

dwt share ships dwt share dwt share '09/'10Bulk carriers 54 2.5 87.1 254 10.2 86.6 133 6.2 95.9 -39.6Other bulk carriers 10 0.4 12.9 35 1.5 12.7 15 0.3 4.1 -82.6Total 64 2.8 100.0 286 11.8 100.0 148 6.4 100.0 -45.5

Ship type2006

2006 2009 2010 dwt-%No mill No mill No mill change

dwt dwt dwt '09/'10

Bulk carriers 306 24.5 531 42.3 937 72.9 92.6 72.1Other bulk carriers 9 0.2 37 1.1 50 5.8 7.4 427.3

Total 315 24.7 568 43.2 987 78.7 100.0 82.3

Ship type dwt %-

40000

45000

50000

55000

60000

65000

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

av. d

wt s

ize

Comment - World bulk carrier fleet

SSMR April 2011 6

www.isl.org

148 bulk carriers with 6.4 million dwt were sold to breakers, compared to 286 vessels with 11.8 million dwt a year earlier. This is only 1.4 per cent of the fleet.

Between 2007 and 2011, the bulk carrier fleet expanded on average by 9.8 per cent per year in terms of deadweight tonnage and the number of carriers by 5.9 per cent.

During the period 2006-2010 2,540 bulk carriers with 194 million dwt were added to the trading fleet. In the same period, only 609 bulk carriers with 25 million dwt were reported to be broken-up.

1.2 Size dimensions of the world bulk carrier fleet

The average size of bulk carriers increased from 43,500 dwt in 1990 to 61,000 dwt at the beginning of 2011. Looking at the new deliveries, there is a trend to larger units, at least 464 Capesize carriers entering the fleet in the past five years were attributable to size classes above 150,000 dwt. Altogether, the world bulk carrier fleet comprised 1,023 of these very large units. During the next years, the increasing importance of larger size classes will continue. The average size of bulk carriers on order is over 86,000 dwt. The ordered tonnage concentrates on bulk carriers in the Capesize segment above 80,000 dwt, thereof 518 vessels with a capacity of 150,000 dwt and above.

2 FUNDAMENTALS OF THE BULK CARRIER MARKET 2010/2011

2.1 Major dry bulk commodities – production, consumption and trade patterns

The strong and steady growth of bulk tonnage, as well as economic uncertainty in several industrialized countries like EU, US and Japan, are expected to keep dry bulk shipping rates depressed. The supply growth in available capacity exceeds the demand growth for raw materials by far. However, due to changing regional patterns of production and consumption of raw materials, seaborne trade may increase more strongly. In addition, transport distances for major bulk commodities such as ore and coal are increasing. World crude steel production jumped 15.2 per cent from 2009 to 2010. Most recent statistics of the International Iron and Steel Institute (IISI) indicate that China had a share of 44.5 per cent of the 1.4 billion tonnes world steel production. China’s average yearly production growth in the period 2001-2010 was 17 per cent. Compared with this development, the year on year change in 2010 reached a rather moderate 9.3 per cent, but one has to keep in mind that China was the only main steel producer that had increased production in 2009. The EU countries showed a steel production growth of around 20 per cent across the board, but they are still short of their 2008 production volumes.

nations (controlled tonnage) as of January 1st, 2007-2011 (dwt – yearly average growth rate)

Ships of 1,000 gt and over Fig. 4: World steel production by area 1994-2011 (a)

ISL, based on International Iron and Steel Institute; (a): 2011 estimated Fig. 5: Overview on major commodity markets 1996-2009 (Tonne-

based Index 1996 = 100)

ISL, based on WTO, World Trade Statistics 2010

Tab. 4: Dry bulk traffic of major ports by exporting and importing

0.0

25.0

50.0

75.0

100.0

125.0

0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0

mill

dw

t 201

1

average annual dwt growth 2007- 2011 in %

Korea, Rep. of

China, PR of

Germany

Japan

Greece

0

200

400

600

800

1000

1200

1400

1994 1996 1998 2000 2002 2004 2006 2008 2010

mill

tonn

es

Others CIS

North America EU-15

Asia

1.6

80

100

120

140

160

180

200

220

1996 1998 2000 2002 2004 2006 2008

coal consumption

China

OECD

World

0

200

400

600

800

1000

1200

1996 1998 2000 2002 2004 2006 2008

iron ore imports

China

OECD

World

80

100

120

140

160

180

200

220

1996 1998 2000 2002 2004 2006 2008

coal production

China

OECD

World

70

120

170

220

270

320

370

420

1996 1998 2000 2002 2004 2006 2008

iron ore production

China

Australia

Brazil

World

Comment - World bulk carrier fleet

SSMR April 2011 7

www.isl.org

According to preliminary statistics of the Australian Bureau of Agricultural and Resource Economics, world iron ore trade in 2010 exceeded 1.1 billion tons, of which the lion’s share went to China. The People’s Republic imported 692 million tons of ore, an increase of 8.6 per cent compared to the 637 million which were supplied in 2009. At the same time, China is one of the largest iron ore producing countries in the world. On the export side, the top four exporting countries, namely Australia, Brazil, India and South Africa, exported a combined 830 million tons of iron ore exports in 2010, equal to a market share of 80 per cent.

2.2 Trade in major bulk commodities 2009/2010 and short term outlook

World seaborne iron ore trade nearly doubled during the past ten years, reaching 1.07 billion tonnes in 2009. Almost three quarters of this growth (manifested in an average growth of 25 per cent per annum) were attributable to Chinese imports. Although nearby Australia is the most important exporter for China, South American iron ore was also used to cover demand in the Far East, leading to rising long haul transports of raw materials.

2.3 Dry bulk port traffic – regional highlights 2009/2010

The development of seaborne trade in major bulk commodities is mirrored in the development of the major exporting and importing ports. Between 2009 and 2010, the world’s largest ports’ dry bulk traffic recovered and grew overproportionally. Due to strong Chinese demand for iron ore and, more recently, for coal, Australian and Brazilian ports of loading were increasingly busy and show, if there were no problems caused by administrative barriers or technical problems, consistently double digit growth rates (compare Table 10). Leading exporting bulk ports

The world’s largest dry bulk port, the port of Qinhuangdao, handled 224 million tonnes of coal in 2010, up 8.6 per cent from 2009. While demand development was mixed in the Asian OECD countries, China’s coal consumption actually increased as described above. The Australian ports of Newcastle, Hay Point and Gladstone together loaded 263 million tonnes of coal in the fiscal year ending June 2010, approximately 29 million tons more than in 2009, equal to a growth of 12.2 per cent. The recovery of the US and Canadian heavy industries helped some of the bulk ports located at the Great Lakes and the Saint Lawrence Seaway reach a better utilisation. Sept Iles, for example, shipped 23 million tons of coal in 2010, a quarter more than during 2009. The Chinese demand for raw materials also helped Australian iron ore ports to consolidate their market

areas (port regions) 1999-2009 (mill tonnes, per cent)

ISL Port Data Base 2011

Fig. 6: Quarterly iron ore and coal traffic of major exporting ports by regions 2009-2011 (1st quarter)

ISL Port Data Base 2011; Brazil: total exports, based on Ministry of Development, Industry and Foreign Trade

Tonnage additions/reductions: Additions (newbuildings) entering the fleet refer to the fleet data of the following year. Reductions (broken-up) tonnage refer to the fleet data of the respective year. Explanatory note – Bulk carrier dwt-size grouping

Handysize: 10,000 - 39,999 dwt Handymax: 40,000 - 49,999 dwt Supramax: 50,000 –59,999 dwt Panamax: 60,000 - 79,999 dwt Capesize: >= 80,000 dwt

Explanatory note Major Open Registries Countries permitting the registration of ships owned by non-residents. In general, ISL figures on open registry flags are restricted to the top ten major flags: Panama, Liberia, Bahamas, Malta, Marshall Islands, Cyprus, St. Vincent, Antigua & Barbuda, Bermuda and Cayman Islands. (01.01.2008).

Fig. 7: Development of dry bulk voyage rates on the Tubarao to Rotterdam trade January 2005 to March 2011

Port regions (a) 99-04 04-09 1999 2009Exporting areas 53 6.0 5.4 100.0 100.0Oceania 16 5.8 6.9 52.5 55.6South America 23 8.5 4.3 29.7 31.6Africa 14 2.0 2.5 17.8 12.8Importing Areas 80 2.6 -0.4 100.0 100.0North Range/UK 30 1.8 -3.9 29.8 23.8Far East 13 3.6 -0.3 31.4 32.8US 15 -0.8 0.1 26.1 22.6South East Asia 22 8.2 4.2 12.8 20.8

(a) South East Asia: India, Pakistan, Thailand, Singapore, Malaysia, Indonesia, Philippines; North Range: 10 major North Range ports (Europe)

No of

Ports

average an. growth in % % share of total

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

gro

wth

ove

r sam

e q

uart

er p

rev.

yea

r

Iron ore

Australia Brazil

-30.0

-20.0

-10.0

0.0

10.0

20.0

30.0

40.0

gro

wth

ove

r sam

e q

uart

er p

rev.

yea

r

Coal

Australia South Africa

Comment - World bulk carrier fleet

SSMR April 2011 8

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position. In the fiscal year 2009/2010, combined iron ore shipments in Port Hedland and Dampier grew by 16.5 per cent to 315 million tons. Interestingly, the three top Brazilian iron ore ports grew at the same pace up to the same traffic volume. Their growth ranged between 31.2 per cent for Tubarao (118 million tons in 2010) and 6.3 per cent for Sepetiba (88 million tons). Together with the port of Itaqui (another 110 million tons) they serve especially the European market. Traffic rebound 2009/2010

The quarterly development of bulk traffic of major exporting ports reveals the impact of China’s increased demand in 2010. Iron ore exports of the three major Australian ports actually increased by 7.3 per cent in the calendar year 2010. The record volume of 86.9 million tonnes loaded during the last quarter of 2010 was even 8.8 per cent above the respective volume of 2009. The top Brazilian ports outperformed these results and climbed 27.5 per cent during the four quarters in 2010. In total, Tubarao, Sepetiba and Itaqui shipped 327 million tons in 2010. Coal shipments showed a similar development, though on a lower level. During 2010, China’s increasing imports of coal enabled Australian ports to let their coal shipments rise by 8.8 per cent, while South Africa’s port of Richards Bay saw an increase in demand of 28 per cent (see Figure 7).

2.4 Dry bulk market – freight rates and prices

Time charter rates

Oversupply issues have plagued the dry bulk market since mid-2010. In 2009, these oversupplies were to a large extent cushioned by cancelled orders, China’s healthy growth and rising demand for foreign coal, and a high number of demolitions. Since last year’s autumn, a huge number of pre-crisis orders came into service and still will hit the waters in the next two years to come, as it normally takes three years for a ship to be delivered after ordering. These deliveries put pressure on the market and keep dry bulk shipping rates from recuperating. Even though the seaborne sector sees a pick-up in global demand for coal and iron ore, the enormous rise in available vessels led to decreasing rate levels. More recently, shipping rates have oscillated around rather low levels. Demolition, second hand and contracting prices

The bulk sector recently had to absorb the highest amount of new ships ever. Moreover, ships totalling 253 million dwt are on order, including 31 bulkers for Vale carrying 400,000 dwt each coming afloat in 2013 to serve China. Demolition prices during the last year react counter-cyclically. Normally relatively low scrapping prices should be due, but because of increasing steel prices and the Pakistani scrapping yards back in service after closing due to new environmental laws, scrapping prices were around

ISL based on Fearnleys Fig. 8: Monthly development of bulk indices 2005-2011

ISL based on Baltic Exchange

SSMR Guide to relevant market information: Fearnleys: www.fearnleys.com Platou: Platou Monthly, Platou Report: www.platou.com Barry Rogliano Salles: BRS online market information:

www.brs-paris.com ISL Shipping Statistics Yearbook 2010 Esso – Oeldorado: www.esso.ch BP – Statistical Review of World Energy http://www.bp.com EIA Energy Information Administration: www.eia.doe.gov International Grains Council: www.igc.org.uk

IHS Global Insight: World Trade Service IHS Global Insight's World Trade Service provides clients with the most comprehensive view of international trading markets and commodities. Forecasts are updated on a quarterly schedule and are delivered electronically via the Internet. Exports by Country/Region with Trade Partner Regions/Countries Imports by Country/Region from Trade Partner Regions/Countries Real Value of Trade and Nominal Value of Trade History for Total Value Data: since 1980. History for Value by Volume: since 1995.

ISL Port Data Base

The ISL Port Data Base contains structured, comparable data from 1980 onwards for approximately 400 leading world ports. This unique data base is made possible by our network of port partners throughout the world providing the broad information for our annual ISL Port Data Base Survey. Since 2005, ports can provide their data via our online questionnaire. Cargo traffic and commodities (154 items) Total cargo traffic Loading categories Major bulk commodities Cargo traffic by continents

Container traffic by continent (55 items) TEU (laden/empty) Containerised cargo (tons) Degree of containerisation

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Comment - World bulk carrier fleet

SSMR April 2011 9

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25 per cent higher than one year before. Broken-up bulk carrier tonnage reached a volume of only 6.4 million dwt in 2010, but analysts expect a gigantic 22 million dwt to be scrapped this year in prospect of rates still at the bottom.

3 THE SHIPBUILDING MARKET FOR BULK CARRIERS/FUTURE TONNAGE SUPPLY

3.1 New orders and order book development

In 2010, ordering activity was surprisingly strong in the bulk carrier segment, knowing that the order volume was already at a high level. After the rapid decline in shipbuilding orders in 2009 with only 47 million dwt at least 93 million dwt were reported as new orders in 2010 (incl. late news from previous years). Though some of these reported orders may actually be contracts that had previously been cancelled or resold, the high number of ‘fresh orders’ exceeds experts’ expectations by far. In early 2011, the order book for bulk carriers comprised 2,944 carriers with 57 million cgt (253 million dwt). The dwt-share of the ordered tonnage in the existing bulk carrier fleet stood at 48 per cent. These figures indicate huge overcapacities in the coming years. Around 33 million cgt (144 million dwt) of new bulk carrier tonnage is due for delivery in 2011, which represents more than half of the ordered tonnage. Provided that these ships will be delivered as scheduled, the new deliveries will lead to a fleet increase of about 20 per cent until the end of 2011. However, it is expected that some of the orders will be stretched, and there may still be further cancellations.

3.2 Leading shipbuilding countries

At the beginning of 2011, 99.2 per cent of the total bulk carrier tonnage on order was attributable to yards in Asia (China, Japan, South Korea). The Asian dominance is not only reflected in the order book at the beginning of 2011, but also in the existing world bulk carrier fleet. Only 6.4 per cent of the existing bulk carrier tonnage was not built on Asian yards. Looking at the order book end of 2010, China has strengthened its leading position and is in the first rank with 29.6 million cgt equal to 51.3 per cent of the total world bulk carrier order book, followed by Japan with 12.1 million cgt (21.0 per cent) and Korea with 10.9 million cgt (18.9 per cent). Besides the Philippines (3.9 per cent), all other shipbuilding countries had a share of less than 3 per cent. The European shipyards, organised in CESA, hold a cgt market share of only 0.7 per cent, slightly lower than in 2000 (1.0 per cent). According to IHS Fairplay, about 200 yards are currently involved in bulk carrier shipbuilding. Hyundai is the largest shipbuilder for bulk carriers.

Fig. 9: World bulk carrier fleet - share of ordered tonnage (dwt) on existing fleet as of January 1st, 2001-2011

Fig. 10: World bulk carrier fleet - new orders and broken-up tonnage, quarterly 2004- 2010 (mill dwt)

Fig. 11: World bulk carrier order book, quarterly 2004- 2011 (mill cgt)

Statistical details Broken-up bulk carriers p. 29 Second hand and newbuilding prices p. 30 Demolition prices p. 30

Market review Freight and charter market p. 55– 65 Shipping prices and costs p. 67 – 69

SSMR InfoLine Special

Statistical details “The world bulk carrier order book” Bulk carriers on order by type p. 39 Bulk carriers on order by type and delivery schedule p. 40 New bulk carrier orders by type and major countries

of build p. 41 New bulk carrier orders by type and major countries

of domicile p. 42 Explanatory note The compensated gross tons (cgt) concept was first devised by shipbuilder associations, and adopted by the OECD Council Working Party on Shipbuilding (WP6), in the 1970s to provide a more accurate measure of shipyard activity than could be achieved by the usual gross ton (gt) and deadweight ton (dwt) measures. The compensated gross tons (cgt) is calculated by multiplying the tonnage of a ship by a coefficient, which is determined according to type and size for a particular ship. Cgt is used as an indicator of the volume of work that is necessary to build a given ship. The new compensated gross ton system (cgt) coefficient for a 10,000 gt bulk carrier is 7,987 cgt.

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