What is a bulk carrier? ① Focusing on ship types and cargo volume
1. Types of bulk ships
Bulk carriers are classified into four major categories. Based on deadweight tonnage (maximum weight of cargo that can be loaded on a ship, DWT), cape for more than 100,000 DWT, Panamax for 60,000-100,000 DWT, Supramax for 40,000-60,000 DWT, and Handy for less than 40,000 called size. More specifically, Valemax (VLOC) for 220,000 DWT or more, Mini Cape for 100,000 DWT, Kamsarmax for 80,000 to 90,000 tons, and Ultramax for 60,000 to 70,000 tons (Ultramax) can also be subdivided.
Usually, Handy and Supramax ships are equipped with crane/grab facilities to load/unload their own cargo. Because of its relatively small size, it is less restricted by the water depth of the port, and it is possible to load and unload even in places where facilities in the port are lacking, so it is very easy to go in and out of various ports. Panamax-class and larger ships (including capes) do not have their own cranes, so they use cranes in the port for loading/unloading. In addition, due to water depth restrictions, ports that can be called are usually fixed. Looking at the items that are mainly transported, Cape ships mainly transport iron ore and coal, while Panamaxes mainly transport coal, grain, bauxite, and iron ore. It mainly transports fertilizer, raw sugar, and raw wood.
2. Transportation flow
The transport flow might be helpful to understand by looking at the picture above. Mining/mining is carried out at a mine/quarry, and iron ore, coal, ore are sorted, and the classified cargo is moved to the port of loading (port of export). Rail is mainly used for transportation to the shipping port, but trucks are also used for short distances. Cargoes moved to the shipping port are piled up at the port.
As you know, unlike container ships, bulk carriers do not need to be packed in boxes, so cargoes in ports are piled up like mountains. The cargo collected in this way is transported to the port of discharge (port of import) through loading on board. As a point to note in transportation, when loading heterogeneous cargo (previous: iron ore, current: fertilizer) in the previous and current voyages, shipment is possible only if Hold Cleaning has been thoroughly carried out and passed. Ships arriving at the unloading port go through unloading and are transferred to storage depending on the type of cargo, and after storage, they are transferred to the final consignee.
3. Main Cargo by Ship
Let's take a look at the breakdown of the previously mentioned linear punishment major shipment cargo composition. Looking at the picture above, the cape has an absolutely large amount of iron ore and coal, and among them, iron ore accounts for an overwhelmingly high proportion. Panamax, on the other hand, is classified as iron ore (20%), coal (53%) and grain (21%). As I will explain further when dealing with the market conditions next time, the market conditions closely related to the movement of iron ore are the cape line, the coal line is a panamax, and the grain line is a panamax and sub-linear.
Therefore, the bulk carrier market conditions are acting as 『China's economic deterioration -> construction economy downturn -> steel demand slowdown -> iron ore demand slowdown -> trade volume decrease -> cape linear decline factor". Conversely, even in the midst of economic deterioration, it can appear in various ways, such as 『Artificial stimulus -> Liquidity supply -> Economic recovery -> Demand increase" or 『Economic stimulus -> China's production cuts -> Steel prices rise -> Steel companies' performance recovering. there is.
The first two cases will be linked to stock price movements of shipping companies, and the last case will be linked to stock prices of steel companies such as POSCO and Hyundai Steel.
4. Inspection of major cargo volume
Dry Bulk Let me tell you about the major maritime transport volume. Major 5 cargoes include iron ore/coal (including both fuel and coking coal)/grains (including soybean, wheat, and corn)/bauxite/fertilizer. Let's take a look at bulk carrier maritime traffic volume for the past four years.
Looking at the table above, it can be seen that the 5 major cargoes account for 67% of the total trade, with iron ore, coal, and grain accounting for the highest share in that order. If you look at the market conditions in 2022, you can see that iron ore and grain shipments grew negatively compared to 2021 (iron ore: -1.9%, grain: -3.4%). Iron ore was affected by concerns over the Chinese economy, and grain by restrictions on grain exports due to the Russia-Ukraine war.
This figure shows the top 4 import/export countries based on maritime trade volume. Export countries are Australia 884 million tons, Brazil 343 million tons, South Africa 0.63 billion tons, Canada 0.53 billion tons, and import countries are China 1.097 billion tons, Japan 106 million tons, Korea 0.69 billion tons, and Germany 0.37 billion tons. China's iron ore imports are overwhelmingly large, while Australia and Brazil appear in that order as exporters. Brazil is at a disadvantage in terms of freight rate competition in exporting iron ore to China because it is far from Australia.
Therefore, we are competing with Australia by reducing costs by utilizing ultra-large coal ships such as the ‘Sea Qingdao’ introduced in the last ship type. Also worth looking at is the political dispute. In 2020, Australian coal imports were restricted in retaliation for Australia's demand for an international investigation into the origins of Covid-19 in China. Due to these trade disputes, major cities in China suffered from power shortages at the time.
Ultimately, China increased coal imports from Russia, South Africa, and the United States, leading to an increase in coal prices. I remember. The political dispute between the two countries has led to iron ore, and the Australian government even restricts iron ore exports to pressure China. For this reason, if China increases iron ore imports from Brazil, remember the investment points that will help Brazil's state-owned company Vale S.A. (VALE) sales.
Thanks.