freight market of grain products in 2015-2016
TRANSCRIPT
Freight market of grain products in 2015-2016
Phaethon International is a global operator of dry bulk vessels. Company using a large portfolio of vessels ranging 20-170k dwt (handysize-supramax-panamax-capesize) either on contract basis or in the spot market and transporting cargo for our customers worldwide.
Started activity in 2009
Initial focus was on shipments ex Black Sea to Far East and Indian ocean
67 vessels taken into time-charter during first year of operation and 3 mio tons of dry cargo moved from ports of Black Sea and Mediterranean seas to ports of Indian and Pacific ocean
From 2009 till 1st april 2015 it was chartered arnd 1250 ships and carried arnd 145 mio tons of dry cargo worldwide
History
Major cargo routes served
Persian Gulf – Mediterranean/Us Gulf: sulphur – urea (supramax – panamax )Persian Gulf – Mediterranean/Baltic: steels (handy – supramax )Persian Gulf – India/SEASIA: steels (handy – supramax)Persian Gulf – Red Sea: clinker-DRI A(B) (handy – supramax)Inter PG trade: steels/aggregates/iron ore (handy – supramax – panamax )Indonesia – India: coal (supramax – panamax)Red Sea – Persian gulf/India/Seasia: fertilizers (handy – supramax)Black Sea – China / Brazil – China : iron ore (cape-size)Baltic/Black sea – Persian Gulf/India/China : fertilizers (handy – supramax – panamax) Black sea – Persian gulf, India, Red sea : grains (handy – supramax – panamax)Black/Mediterranean sea – Persian Gulf/India: steels (handy – supramax )Baltic/Black sea – South America : fertilizers (handy – supramax)Black sea – Mediterranean : grains (handy – supramax – panamax)Black sea – Persian Gulf, Seasia South Korea: pig iron (supramax – panamax)Black sea – USA : steels - pig iron (supramax – panamax)USA – Black Sea : coal – scrap (supramax – panamax )ECSA/USA – Persian gulf – India - China: sugar - grain (supramax – panamax )West Africa – Black sea : coal (panamax)
Structure of Phaethon fleet
as per 20.05.2015• Cape-size: 16 vsls• Panamax: 21 vsls• Supramax: 22 vsls• Handy-size: 18 vsls TOTAL 77 VSLS
Fixed on spot market: 56 vslsFixed on period (3-7 month): 21
vsls
Company Highlights/This is Phaethon today
Phaethon is headquartered in Odessa and also has office in Seoul
35 employees
75-110 ships in operation
Abt 70 mio tons was moved in 2014
One of the biggest operators from Black Sea and Mediterranean
Reputation of reliable, flexible and predictable company
Strong cash flow / balance sheet
Unique tailor-made IT solutions
Risk management is a key part of Phaethon which includes portfolio of the risk management techniques including counterparts and operational risks.
1. Fleet Development2. Demand side3. Market Indicators
GLOBAL MARKET OVERVIEW
1. Fleet Development
1. Fleet Development
1. Fleet Development
1. Fleet Development
1. Fleet Development
1. Fleet Development
2. Demand Side
3. Market Indicators
1870 – 1914 super boomUnderlying demand drivers:UK Empire- Free trade policy- Innovation & industrialization; mechanization of industry; fast communication– steam– electricity– telegraphy- Cheap energy to fund industrial
growth
1950 – 1974 super boomUnderlying demand drivers:US Empire– oil in– grain / coal / timber out European reconstruction– raw materials in– manufactures out Japan reconstruction– raw materials in– manufactures out Cheap oil (usd 1.5-3.5 /bbl)
2003 – 2008 super boomUnderlying demand drivers:China / India– raw materials in– manufactures and services outBrazil / Russia / Middle East /
Australia / USA etc.– raw materials out– manufactures inFast growth in industrialization
and technology
• 1870 – 1914 super boom• 1950 – 1974 super boom• 2003 – 2008 super boom
And between all was……not good
150 years of shipping cycles
• 1870 – 1914 super boom• 1950 – 1974 super boom• 2003 – 2008 super boomAnd between all was……not
good
150 years of shipping cycles
WHEN CAN WE EXPECT NEXT SUPER BOOM?
Today BDI is….
On 20th May 2008 BDI = 11793 points
On 9th February, 2015 BDI slipped to 554 points and matched 1986 low(Year ago on 9th Feb, 2014 BDI=1096 points)
On 18th February, 2015 BDI slipped to 509 points….
PREDICTION MARKET’S TOOLS
1. Economic Modelling of Shipping Markets
2. Forward Freight Agreement (FFAs)
PREDICTION MARKET’S TOOLS
FFA - Freight derivatives provide a means of hedging exposure to freight market risk through the trading of specified time charter and voyage rates for forward positions.
An FFA or Forward Freight Agreement is simply a swap on freight costs.
In order to benefit from rising prices people can buy FFAs.
They can also sell FFAs if they believe freight prices will fall.
FFAs always have a buyer and a seller - one will make money at the settlement and the other will lose it…..
CAPESIZE FFA’S
2011 2012 2013 2014 2015 2016 2017 2018 20190
5000
10000
15000
20000
25000
30000
18th October 2010 17th March 2011 16th March 2012 18th March 201317th March 2014 17th March 2015 Actual market
REAL-ITY
2010 (estimation)
2011 (estimation)
2012 (estimation)
2013 (estimation)
2014 (estimation)
2015 (estimation)
PANAMAX FFA’S
2011 2012 2013 2014 2015 2016 2017 2018 2019 20200
5000
10000
15000
20000
25000
18th October 2010 17th March 2011 16th March 2012 18th March 201317th March 2014 17th March 2015 Actual market
REALITY
2010 (estimation)
2011 (estimation)
2012 (estimation)
2013 (estimation)
2014 (estimation)
2015 (estimation)
SUPRAMAX FFA’S
2011 2012 2013 2014 2015 2016 2017 2018 2019 20200
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
18th October 2010 17th March 2011 16th March 2012 18th March 201317th March 2014 17th March 2015 Actual market
REALITY
2010 (estimation)
2011 (estimation)
2012 (estimation)
2013 (estimation)
2014 (estimation)
2015 (estimation)
HANDYSIZE FFA’S
2011 2012 2013 2014 2015 2016 2017 2018 2019 20200
2000
4000
6000
8000
10000
12000
14000
16000
18th October 2010 17th March 2011 16th March 2012 18th March 201317th March 2014 17th March 2015 Actual market
REALITY
2010 (estimation)
2011 (estimation)
2012 (estimation)
2013 (estimation)
2014 (estimation)
2015 (estimation)
BLACK SEA MARKET OVERVIEW
1. Grain season 2014/152. Forecast for 2015/2016 3. Black Sea: Supply / Demand
1. GRAIN SEASON 2014/2015
Harvest 2014/2015• Russia – 104 mmt (92.30 mmt 2013/14)• Ukraine – 59.40 mmt (57.63 mmt 2013/14)• Kazahstan – 17.16 mmt (18.23 mmt 2013/14)
Grain export 2014/2015• Russia – 29 mmt (25.70 mmt 2013/14)• Ukraine – 34.40 mmt (32.50 mmt 2013/14• Kazahstan – 6.70 mmt (7.70 mmt 2013/14)
Total export 2014/15 expected around 70 mmt ( 65.9 mmt at 2013/14)
1. GRAIN SEASON 2014/2015
WORLD EXPORT: SHARE OF BLACK SEA REGION World exports of wheat:(USA,Canada, Australia,Argentina, Black Sea region EU-27, others)• 2009/10 – 28.2%• 2010/11 – 10%• 2011/12 – 25.90 %• 2012/13 – 17%• 2013/14 – 20%• 2014/15 – 23.4%
World exports of corn: (USA,Brazil, Argentina, Black Sea region, others)• 2011/12 – 17.70 %• 2012/13 – 16.3%• 2013/14 – 19.4%• 2014/15 – 18.9%
2. FORECAST FOR 2015/2016
Prospects of new 2015/16 grain season:
Grain production forecast for season 2015/16:• Ukraine - 53.90 mmt ( 59.40 mmt 2014/15 & 57.63 mmt 2013/14)• Russia – 93-100 mmt (104 mmt 2014/15 & 92.30 mmt 2013/14)• Kazahstan – 16-17 mmt (17.16 mmt 2014/15 & 18.23 mmt 2013/14)
Total grain production at Black Sea region for season 2015/16 is expected around 164 mmt (arnd 17 mmt less then 2014/2015) Forecast of grain exports for season 2015/16:Total grain exports at black sea region for season 2015/16 is expected around 64 mmt (arnd 6 mmt mmt less then 2014/2015)
3. BLACK SEA: SUPPLY/DEMAND
GRAIN• Black Sea – Mediterranean/Continent - panamax/supra/handysize• Black Sea – Red Sea (Jordan(Aqaba)/Saudi ) - panamax/handymax/handysize• Black Sea – PG - India (UAE /Qatar/Iran/Pakistan/Bangladesh(Chittagong) - panamax/handymax/handysize• Black Sea – Seasia (Indonesia,Philipines) - pandymax/handysize• Black Sea – China (corn): (panamax/handymax)
OTHER CARGOES• Black Sea – China: iron ore (mainly capesizes/split for panamax mainly during
booming of capesize• Black Sea/Turkey – PG/India/SEASIA: steels (handymax/ handysize)• Black Sea – USA: pig iron (panamax/handymax)• Black Sea – India/China: coal/metcoke (panamax/handymax/handysize)• Black Sea - Mediterranean/Continent: coal, hbi (handymax/handysize)• Black Sea – PG/India: clay (handysize)• Black Sea/Turkey – USA: steel (handymax/handymax. panamaxes only for slabs)• Black Sea – South America: fertilizers (mainly handysize)
MAJOR CARGO ROUTES:
3. BLACK SEA: SUPPLY/DEMAND
• USA – Black sea: coal (capesize/panamax)
• USA – Med (Turkey, Egypt): scrap,petcoke (supramax)
• Continent – Med (Turkey, Egypt): scrap (handysize,handymax,supramax)
• West Africa – Black sea: manganese ore/bauxite (handy/handymax)
• Indonesia – Black Sea: nickel ore (handy and handymax)
• PG/WCI-Red Sea: clinker, hbi, grain (panamax, handymax, handysize – workable via Black Sea mainly during grain season ONLY)
• China – Med/Black Sea: steels/projects (handy, handymax)
• China/Australia/South Africa – Black Sea : coal(panamax)
Supply of tonnage:
3. BLACK SEA: SUPPLY/DEMAND
• Low cargo liquidity at area (especially comparing with 2009-2010). In 2014 also affected by military action in the east of the Ukraine.
• Reducing number of players (cargo traders who accept a risk) on the market
• High correlation of freight rates with grain season/ disbalance of rates (but less influence in 2014/2015 comparing with 2013/2014)
• One of the most important point to be considered at Black Sea is the probability of sudden freight rate volatility due to supply/demand disbalance.
• Season risks (severe winter/demand for tonnage after end of ice)
• Freight volatility has almost no link to piracy at Aden anymore/fixed Gulf of Aden costs
• Less difference between fronthaul and backhaul
SUMMARY:
ODESSA, UKRAINETEL: +38-048-737-51-63
E-MAIL : [email protected]
[email protected]@phaethon.com.ua
SEOUL, KOREA TEL: +82-2-738-0667
E-MAIL : [email protected]
Our goal is to continue to be
your first choice when you are looking for a dry bulk
operator!
Legal notice: the information and data contained in this presentation is derived from a variety of sources, own and third party’s, public (Clarkson and Bancosta research reports. www.ukragroconsult.comwww.blackseagrain.net), and is provided for information purposes only. Phaethon International assumes no liabilities or responsibility for any errors or omissions in the content of this report. All rights reserved.