Ocean Carriers
...well as the number of days the ship is charted will determine the revenue from the ship.
• For us to examine the viability of the investment, it is important to consider the possible daily hire rate as well as the demand for such vessels.
• Since the daily hire rate is determined by the supply and the demand for such services, we first take a look at the supply of capesize vessels.
• Future supply of the capesize vessels is the sum of current vessels, minus the vessels that will be scrapped, plus new ships delivered
• There are 2 millions capesize over the age of 24 years.
• We can expect that these old vessels would be soon scrapped, which in turn would reduce the supply of the capesize vessels.
• However, such old vessels were small a small portion of the total exsisting vessels. So we would not expect a large reduction in supply due to the scrapping of old vessels.
• Exhibit 3 shows the current order for the next 4 yrs.
• There will be a large supply in 01’,02’,03 therefore we will see an increase in capesize vessels in the future.
In summary,
1. Exsisting capesize vessels are relatiley new, thus we do not expect a large reduction in capesize vessls due to the scrapping of old vessels.
2. a large numver of new ships will be delivered in the next 3 years.
3. we expect a substantial increase in the supply of capesize vessles in the next 3 years.
Future prospect of the market.
In summary, the supply of the vessel may increase substantially in the next 3 years, which may decrease the daily hire rate in the short term. However, considering a favorable forecast of Austrailan and Indian production, we can expect a favaorable demand for capesize vessel service in the long run.
Linn used a shipping industry consulting firm to help her forecast daily hire rates for a new capesize
Ex 6 will show the estimate of the daily hire rate in the...
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