DRYBULKOUTLOOKMARINEMONEYGULFFORUM

7TH MARCH2017

• DryCargoMarkets- Overview

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• Sowhytheoptimism..

• ,NewBuildings Thereportedordersfortheentire2016were24VLOCs,1Capesize,2Panamaxes,5Supramaxes,and6Handysizes.NoordersinJan 2017

Demolition Thereporteddemolitions for2016wereabout376shipstotalingabout30mndwt.Jan2017saw21unitstotaling2mn dwtdemolished.

VesselValue NewBuildingpricesarestagnant, losing8-10pct yoy.Secondhandprices&transactionsincreasing– 71unitsinJan2017!

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• Demand– CommodityPrices• Coal,Ironorepriceshavesurges2nd half2016,boostingfreightsentiments

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- FFAs

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• BUT..• WillChinacontinuethebullrun?

- OROBFUELINGDEMAND,BUTUSD188BNCAPITALOUTFLOWIN2016- YUANDEPRECIATION/HIGHDEBTTOGDPRATIO- POSSIBLETRADEWARWITHUS?

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• USD&‘Trump’card• Lasttwoshipping‘crisis’wereFINANCIALCRISISandweremoresevereandlongerthanearlier‘shippingevent

drivencrisis’

• USDStillthedominantcurrencyforglobaltrade– nearly41%ofglobaltransfersinUSD• 2012/2013‘MarketRecovery’influencedbyQEbyUSFed(QE1/QE2/QE3- 3.5tnUSD)• ’TrumpFactor’– ‘Importadjustmenttax– Bordertax’/AppreciationofUSDbyover25%!• "Thesizeofdollarappreciationandthetimeframeoverwhichadjustmenttakesplaceareuncertain,eventhoughintheorytheproposed20%border

taxcouldresultinanimmediateandpermanentnominalappreciationofthedollarby25%”- Moodys

Globalization’Eventbased’

‘Financial’

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• Trade&Marketimbalances

• Grainseasonality• Chinesecoastalcoal&coalimporttrade- impactonsupras• Indiancoalimports• Chineseironoreimports• Demolitionlinkedtomarkets– lowdemowhenmarketsrecover• Bunkerprices– slowsteaming

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BackupSlides

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ChinaCoastalCoalShipment

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