Market outlook for the capesize sector from 2010 to 2015

• Main Author: Ng, Han Wei.
• Other Authors: School of Civil and Environmental Engineering
• Format: Final Year Project
• Language: English
• Published: 2011
• Subjects: DRNTU::Engineering::Maritime studies::Maritime management and business
• Online Access: http://hdl.handle.net/10356/44944
• Institution: Nanyang Technological University

This study investigates the key drivers of the Capesize market and performs a holistic fundamental analysis to derive a direction in which the Capesize bulk carrier freight market will take in the time period of 2010 to 2015. The study comprises of 3 Volumes; with Volume 1 focusing on demand drivers, Volume 2 focusing on supply drivers, and Volume 3 evaluating the profitability and possible strategies applicable to invest in the Capesize market over a 5 year period. The objective of this paper, Volume 1, is to examine the demand drivers and its effects on the future Capesize freight market, under the assumption that the supply tonnage growth is constant. Of the demand drivers identified, only Bulk Commodity Demand is found to have the most direct influence on the Capesize freight market. A forecast of iron ore and steel demand by China, and iron ore supply by Australia and Brazil, reveals an increasing trend over the next 5 years. This projected increment translates to demand for Capesize tonnage which in turn exerts an upward pressure on freight rates, pushing it to rise from Band 3 in 2010 to Band 5 by 2015. Given that this forecast only takes into account demand factors, it is recommended to read all 3 Volumes to achieve a more comprehensive and accurate Capesize market outlook from 2010 to 2015.