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Dry Bulk Freight Outlook
2nd Annual Conference
Coal Market in India 2012
DRY BULK MARKET AND INDIAN COAL PERSPECTIVE
2Cape: 100k dwt and above; Pmax: 60k-99k, Smax: 35k-59k, Hsize: below 35k
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DRY BULK FREIGHT MARKET TRENDCONTINUES TO BE IN A STATE OF EXTREME WEAKNESS
COAL FREIGHT TO INDIAHAS FOLLOWED THE BROADER TREND OF TIME CHARTER RATES
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TWO KEY FACTORS IMPACTING THE FREIGHT MARKET OVER LAST 2 YEARS1. BUNKER PRICE- HAVE HAD AN EXTREME NEGATIVE IMPACT ON RATES SINCE 2011
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TWO KEY FACTORS IMPACTING THE FREIGHT MARKET IN LAST 2 YEARS2. FLEET SUPPLY HAS CONSISTENTLY OUTWEIGHED FLEET DEMAND
SUPPLY SIDE DYNAMICS2012 ANOTHER RECORD YEAR
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SUPPLY SIDE DYNAMICSOUTLOOK
SCRAPPING, LAYUPS AND SLOW STEAMING CONTINUE TO KEEP FLEET SUPPLY GROWTH IN CHECK
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STEEL PRODUCTIONREFLECTING THE WEAK MACRO FUNDAMENTALS GLOBALLY
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MACRO FUNDAMENTALS
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CHINA PROPERTIES – IN A RECOVERY PHASE
MONETARY POLICY – COMING TO THE AID ONCE MORE
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PBOC reduced the benchmark interest rate for the 2nd time within a month.
On the same day ECB cut the interest rate by 25 bps BoE increased their asset purchase program by 50 bln pounds.
Fed already extended its operation twist by USD 267 bln, till the end of the year.
COAL MOVEMENTCHINA DEPRESSED – BUT SIGNS OF IMPROVEMENT
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COAL MOVEMENTINDIAN IMPORTS HURT BY RUPEE DEPRECIATION – BUT THE FUNDAMENTAL DEFICIT CONTINUES
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IRON-ORE EXPORTS – WILL SUPPORT THE CAPE MARKET IN 2H12
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INDIA IRON-ORE WOULD CREATE WEAKNESS IN PMAX/SMAX SEGMENTS
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NICKEL ORELOW DEMAND FROM CHINA AND EXPORT RESTRICTIONS IN INDONESIA
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GRAINS TRADEUS GRAINS EXPORT WILL PROVIDE A SEASONAL PUSH TO FREIGHT – WEATHER A CONCERN
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IN SUMMARY
Fleet growth would reduce by more than half in 2013 compared to 2011-12 pace.
Cargo growth would exceed supply only marginally, while the macro risk would remain at elevated levels.
Fundamental Weakness Remains but Volatility to continue.
Market would be better balanced post 2013, with an expectation of demand growth finally exceeding supply growth. But two major risk factors remain:
Europe blow out and a return to global recession would drastically reduce the prospects of demand growth.
A surge in new contracting of the new “economic ship” variety.
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Who are We ?
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World leader in the processing of
agricultural products and the
merchandising of a diverse range of
commodities
Privately held, controlled by the Robert
Louis-Dreyfus trust and approximately 20%
employee-owned
Part of the Louis Dreyfus Group
At a glance
A vital player in the global food chain
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LD COMMODITIES KEY FACTS AND FIGURES
Robert Louis- Dreyfus establishes his vision of the Louis Dreyfus Group:
Excellent profitability
Enters new local markets: Vietnam, Colombia, Ethiopia
Expands new product lines: fertilizers, milk…
Acquisition of four sugar mills in Brazil
Acquisition of the Bazhou oilseeds crushing plant in China
Bazhou(China)
The Group extends its agricultural activities to cotton, sugar, citrus, coffee
International operations serving Europe, the Americas, Africa and Asia
Begins futures trading
The Louis Dreyfus Group restructured into autonomous subsidiaries
Creation of LDCommodities
LDCommodities is rationalized through a matrix organization: Regions/Platforms
Asset-based strategy
Net sales doubled compared to 2006, well above US$35 bn
Dedicated region set up: Middle East and Africa
Expansion in Asia with acquisitions of an edible-oil refinery in India, and a stake in an Indonesian palm-oil plantation company
Investment in Brazilian sugarcane processing facilities and plantations
Pursuing growth, excellent financial performance, confirming benefits of diversification and asset-based strategy
Enters the apple juice concentrate market (China)
Acquisition of Cotton assets
Pursuing logistics investments o/w Port Lampung (Indonesia),cereal terminal (Argentina)
UN Global Compact signatory
1860-19001851 1970s-80s 1990s-2005 2006
2008
Founded by Leopold Louis-Dreyfus trading grain in France and Switzerland
Adds processing operations in citrus and oilseeds to origination and marketing activities
Acquired sugar production in Brazil
Enters metals business
General Lagos (Argentina)
Santa Elisa(Brazil)
Kandla (India)
History
An ambition takes shape
2007 2009 2010
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Net sales US$ 34 bn, Fixed Assets above US$5.5 bn
Approx. 34,000 employees, offices in more than 55 countries
Acquisition of rapeseed crushing plant in Wittenberg (Germany)
Merger of operations with Santelisa Vale (Brazil) to create LDC-SEV
A NEW GROUP WITH 160 YEARS OF HISTORY
PRESENCE IN TRADE FLOWS
COMMENTS
OILSEEDS #3-4 Key presence in major exporters: Brazil, Argentina#4 world crushing capacity
GRAINS #2-3 Key presence in all major grains origins: US, FSU, South America, Australia
RICE #1 Significant participation in the distribution flows to Africa
FREIGHT One of the largest chartering entities Supporting the Group’s commodities Platforms and mitigating
risk
FINANCE
JUICE #3 Recent entry into the Chinese Apple Juice industry
COTTON #1 Expanding assets in Australia and America
COFFEE #4 #1 in Robusta coffee
SUGAR #2 Growing participation in the raw and refined sugar markets
LDC-SEV #2 40 million metric tons crushing capacity per year
METALS #4 Copper concentrates, zinc concentrates, cathodes
MILK >1% market share Sourcing in both New Zealand & Latin America
FERTILIZERS Top 15 in Latin America Recent entry into West African markets through SSI acquisition
PR
OTEIN
STR
OP
ICA
LS
OTH
ER
What
Helping feed and clothe up to 450 million people
LD
CS
EV
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PRODUCING AND MERCHANDISING MAJOR AGRICULTURAL COMMODITIES
expanding in the world’s largest export market where it all started
abundant origination
preparing the future
rich challenges, rapid growth
capturing production and consumption opportunities
Where
Strategically located, strategically diverse
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WORLDWIDE GEOGRAPHICAL SCOPE
Where
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BAHIA BLANCA, ARGENTINADeepwater Grain Export Terminal
GENERAL LAGOS, ARGENTINA Soybean Crush/Grain Export Terminal
PORT CARTIER, CANADADeepwater Transhipment Port
PORTLAND, OREGONGrain Export Terminal
SEATTLE, WASHINGTONDeepwater Grain Export Terminal
HOUSTON, TEXASGrain Export Terminal
A Major Exporter From Every Region of the World
SELECTED PORT FACILITIES
ORIGINATION&
PRODUCTION
OILSEEDS
RICE
GRAINS
JUICE
COTTON
COFFEE
SUGAR
FOOD
METALS
FEED
TEXTILE
FUEL
INDUSTRIAL
PROCESSING&
REFINING
STORAGE&
TRANSPORT
RESEARCH&
MERCHANDISING
PACKING&
DISTRIBUTION
Fixed-Asset Operator
MILK
FERTILIZERS
LDC-SEV
Intelligent Merchant
How
Managing risk and adding value across the supply chain
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PR
OTEIN
STR
OP
ICA
LS
OTH
ER
LD
CS
EV
A SOLID PRESENCE AT EVERY STEP OF THE VALUE CHAIN
45 million tons of cargo carried, equally balanced
between LDC cargo and 3rd party customers including
major global miners, utilities, and steel producers
Total fleet operations, spanning the Capesize,
Panamax, Supramax, and Handysize segments, in
excess of 63,000 vessel days (~172 vessels)
At a glance
Strength, Reputation, and Performance built over 160 years
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A trusted partner and supplier, with an
unmatched record of honoring its
contractual commitments
Expansion driven by relationships with
worldwide chartering organizations that
engage our research, risk management, and
logistics services to assist their operations
LD COMMODITIES OCEAN FREIGHT
Where
Custom solutions for a global marketplace
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Global team, with chartering offices covering all time zones
Global network of offices and logistics specialists in over 55
countries
Capable of providing a wide range of services:
• Short term contracts, vessel leases, and spot cargo voyages
• Long term contracts of affreightment (COA’s)
• Ocean freight price risk management
• Logistics services and support including ocean freight consultancy
• Outsourced chartering and back office solutions
WORLDWIDE GEOGRAPHICAL SCOPE
Kunal KapoorHead of ResearchOcean Freight Platform
Office 91-124-4625 650Mobile 91-9350 770 [email protected]
Louis Dreyfus Commodities India Pvt. Ltd.8th Floor, Tower A,Building No. 5, Cyber City,DLF Phase IIIGurgaon
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FOR MORE INFORMATION
