event_8-10-1-50058f4b5798e

Report
Dry Bulk Freight Outlook
2nd Annual Conference
Coal Market in India 2012
DRY BULK MARKET AND INDIAN COAL PERSPECTIVE
Cape: 100k dwt and above;
Pmax: 60k-99k,
Smax: 35k-59k,
Hsize: below 35k
2
DRY BULK FREIGHT MARKET TREND
CONTINUES TO BE IN A STATE OF EXTREME WEAKNESS
3
COAL FREIGHT
TO INDIA
HAS FOLLOWED THE BROADER TREND OF TIME CHARTER RATES
4
TWO KEY FACTORS IMPACTING THE FREIGHT MARKET OVER LAST 2 YEARS
1. BUNKER PRICE- HAVE HAD AN EXTREME NEGATIVE IMPACT ON RATES SINCE 2011
5
TWO KEY FACTORS IMPACTING THE FREIGHT MARKET IN LAST 2 YEARS
2. FLEET SUPPLY HAS CONSISTENTLY OUTWEIGHED FLEET DEMAND
6
SUPPLY SIDE DYNAMICS
2012 ANOTHER RECORD YEAR
7
SUPPLY SIDE DYNAMICS
OUTLOOK
8
SCRAPPING, LAYUPS AND SLOW STEAMING CONTINUE TO KEEP FLEET SUPPLY
GROWTH IN CHECK
9
STEEL PRODUCTION
REFLECTING
THE
WEAK MACRO FUNDAMENTALS GLOBALLY
10
MACRO FUNDAMENTALS
11
CHINA PROPERTIES – IN A RECOVERY PHASE
MONETARY POLICY – COMING TO THE AID ONCE MORE
 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.
12
COAL MOVEMENT
CHINA DEPRESSED – BUT SIGNS OF IMPROVEMENT
13
COAL MOVEMENT
INDIAN IMPORTS HURT BY RUPEE DEPRECIATION – BUT THE FUNDAMENTAL DEFICIT CONTINUES
14
IRON-ORE
EXPORTS
– WILL
SUPPORT THE
CAPE
MARKET IN
2H12
15
INDIA IRON-ORE
WOULD CREATE WEAKNESS IN
PMAX/SMAX
SEGMENTS
16
NICKEL ORE
LOW DEMAND FROM CHINA AND EXPORT RESTRICTIONS IN INDONESIA
17
GRAINS TRADE
US GRAINS EXPORT WILL PROVIDE A SEASONAL PUSH TO FREIGHT – WEATHER A CONCERN
18
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.
19
Who are We ?
20
At a glance
LD COMMODITIES KEY FACTS
AND
FIGURES
 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
A vital player in the global food chain
21
History
A NEW GROUP WITH 160 YEARS
1851
1860-1900
Founded by Leopold
Louis-Dreyfus trading
grain in France and
Switzerland
OF
HISTORY
1990s-2005
1970s-80s
International
operations serving
Europe, the Americas,
Africa and Asia
The Group extends its
agricultural activities to
cotton, sugar, citrus,
coffee
Adds processing
operations in citrus and
oilseeds to origination
and marketing activities
Acquired sugar
production in Brazil
Begins futures trading
Enters metals business
General Lagos
(Argentina)
2007
2009
2008
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)
Net sales doubled compared to
2006, well above US$35 bn
Net sales US$ 34 bn, Fixed
Assets above US$5.5 bn
Dedicated region set up: Middle
East and Africa
Approx. 34,000 employees,
offices in more than 55 countries
Expansion in Asia with acquisitions
of an edible-oil refinery in India, and
a stake in an Indonesian palm-oil
plantation company
Acquisition of rapeseed crushing
plant in Wittenberg (Germany)
Kandla
(India)
Investment in Brazilian sugarcane
processing facilities and plantations
Merger of operations with Santelisa
Vale (Brazil) to create LDC-SEV
Santa Elisa
(Brazil)
2006
Robert Louis- Dreyfus
establishes his vision of the
Louis Dreyfus Group:
The Louis Dreyfus Group restructured
into autonomous subsidiaries
Creation of LDCommodities
LDCommodities is rationalized through
a matrix organization:
Regions/Platforms
Asset-based strategy
2010
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
An ambition takes shape
22
What
PRODUCING
AND
MERCHANDISING MAJOR AGRICULTURAL COMMODITIES
PROTEINS
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
OTHER
LDC
SEV
TROPICALS
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
market share
Sourcing in both New Zealand & Latin America
MILK
FERTILIZERS
>1%
Top
15
in Latin America
Recent entry into West African markets through SSI
acquisition
Helping feed and clothe up to 450 million people
23
Where
WORLDWIDE GEOGRAPHICAL SCOPE
expanding in the world’s largest export market
where it all started
rich challenges,
rapid growth
capturing production
and consumption
opportunities
preparing the future
abundant origination
Strategically located, strategically diverse
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Where
SELECTED PORT FACILITIES
BAHIA BLANCA, ARGENTINA
Deepwater Grain Export Terminal
GENERAL LAGOS, ARGENTINA
Soybean Crush/Grain Export Terminal
PORT CARTIER, CANADA
Deepwater Transhipment Port
PORTLAND, OREGON
Grain Export Terminal
SEATTLE, WASHINGTON
Deepwater Grain Export Terminal
HOUSTON, TEXAS
Grain Export Terminal
A Major Exporter From Every Region of the World
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How
A SOLID PRESENCE
AT
EVERY STEP
OF THE
TROPICALS
PROTEINS
Fixed-Asset Operator
VALUE CHAIN
Intelligent Merchant
OILSEEDS
FOOD
GRAINS
RICE
FEED
JUICE
COTTON
COFFEE
TEXTILE
LDC
SEV
SUGAR
LDC-SEV
OTHER
METALS
ORIGINATION
&
PRODUCTION
PROCESSING
&
REFINING
STORAGE
&
TRANSPORT
RESEARCH
&
MERCHANDISING
PACKING
&
DISTRIBUTION
FUEL
MILK
FERTILIZERS
INDUSTRIAL
Managing risk and adding value across the supply chain
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At a glance
LD COMMODITIES OCEAN FREIGHT
 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)
 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
Strength, Reputation, and Performance built over 160 years
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Where
WORLDWIDE GEOGRAPHICAL SCOPE
 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
Custom solutions for a global marketplace
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FOR MORE INFORMATION
Kunal Kapoor
Head of Research
Ocean Freight Platform
Office
91-124-4625 650
Mobile
91-9350 770 662
kunal.kapoor@ldcom.com
Louis Dreyfus Commodities India Pvt. Ltd.
8th Floor, Tower A,
Building No. 5, Cyber City,
DLF Phase III
Gurgaon
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