The dry bulk markets have witnessed extreme volatility in recent months, with significant levels of litigation disrupting the market, strong fluctuations in the Baltic Dry Bulk Index (between December 2008 and February 2009 alone the capesize spot market jumped from USD2300 per day to USD18000 per day), and uncertainty as to when the markets are likely to recover.
Paralysis has set in due to the global credit crunch, as demand for steel raw materials has slumped and ships lie idle. It is still unclear the extent to which an enlarged order book will interact with current ship supply. There is a complex play to be made with older ships being lined up for scrap, and uncertain levels of new-build delivery due in the second half of 2009. Early-stage orders are being cancelled or postponed but many of those further along into production will still make their way on to the market, creating the prospect of further oversupply and consequent dampening of prices.
In a challenging global context, where finance is becoming increasingly scarce – both for asset acquisitions and trade finance transactions - it is ever more important for market participants to remain abreast of the latest developments and challenges facing the industry.
Key topics to be covered in the conference include:
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The economic outlook for the dry bulk shipping market
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Outlook for supply/ demand of major dry bulk commodities
- Global iron ore and coal scenarios
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Managing the Order Book
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Scrapping and lay-up – economics and supply challenges
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FFA markets – future for FFAs, BDI, screen trading, options strategies and risk management
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Raising finance – asset finance and trade finance challenges
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Plus: choice of dedicated industy-led workshops looking at
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Litigation and legislation
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Risk management
Who should attend:
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Shipowners and Operators
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Shipbrokers
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Charterers
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Ship Financiers and Investors
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Shipbuilding Project Leaders
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Marine Insurance Professionals
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Commodity and Energy Traders
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P&I Club Executives
PROGRAMME
DAY ONE – TUESDAY 30 JUNE 2009
0800 Registration and coffee
0845 Welcome and opening remarks
Gerard Strahan, Managing Director, Coaltrans Conferences / Metal Bulletin Events
SESSION 1: OPENING KEYNOTES
Chair: Koert Erhardt, Director, Star Bulk Carriers Corp.
0900 The economic outlook for the dry bulk shipping market
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Where the dry bulk shipping market fits in the global economic picture
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Impact of current challenges, and scenarios for future market structure and environment
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Potential timeframe for recovery
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Where might ‘the green shoots’ of recovery come from?
Peter Kerr-Dineen, Joint Chairman, Howe Robinson
0915 Dispute resolution and renegotiation of shipping contracts in today's dry cargo market - A practical view
Benoit Timmermans, Managing Director, Bocimar
0930 China – Saviour of the shipping market?
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Prospects for Chinese economic growth and recovery
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The outlook for Asian economies including India, and impact on raw material demand
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The impact of a volatile international economy and exchange rate fluctuations on import/export decisions
Peter Hickson, Managing Director, Global Basic Materials Strategy, UBS
0945 A freight trader’s view of the markets
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Expectations of the market situation and development for 2009/2010
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Managing the order book
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Assessing and managing counterparty risk in a volatile market
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Strategic considerations and managing market risk
Tom Cutler, Analyst-Trader, SwissMarine Services SA
1000 Discussion Forum
No participants in the shipping community are immune to the effects of the current global economic situation. Our panel will discuss their outlook on the challenges to be overcome in order to achieve recovery. Are there signs suggesting a timeframe for recovery? In what ways will the downturn impact on relationships within the industry long-term? Are there measures that industry participants can take to reinvigorate the market?
1020 Networking Break
SESSION 2: KEY DRIVERS FOR THE DRY BULK MARKETS
Chair: Nicolai Hansteen, Chief Economist, Lorentzen & Stemoco AS
1050 Outlook for supply/demand of major dry bulk commodities
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Drivers of the freight market in the first half 2009
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What are the most reliable early signals of demand growth in an opaque market?
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Outlook in light of the order book
Derek Langston, Director, SSY Consultancy and Research
1105 A macroeconomic view of the global iron ore and steel markets
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Global iron ore and steel demand/ supply scenarios and impact on freight market
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Developing countries – to what extent do these represent a source of market recovery?
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What does this mean for future iron ore/ steel prices?
Jim Lennon, Executive Director, Commodities Research, Macquarie Securities Group
1125 Responding to the new market paradigm
1140 Global metcoal and thermal coal demand and impact on the freight markets
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Timeframe for recovery of global metcoal demand – short, medium and long-term outlook
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Freight movements for metcoal market – how have these changed?
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Role of China in driving the metcoal markets
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Key drivers of global thermal coal markets
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Impact of freight rate drop on global thermal coal flows
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Pricing and availability
Daniel Brebner, Executive Director, Commodity Research, UBS AG
1155 Force majeure and its application to contracts
Damian Honey, Partner, Holman Fenwick Willan
1210 Discussion Forum
This discussion will centre on the key drivers for the dry bulk market and the role they might play in revitalising the sector. Our panel will debate the importance of each of the key freight market drivers. Do demand/ supply scenarios of dry bulk commodities conform to a cyclical trend? To what extent might low freight rates attract increased transport by sea?
1230 Networking Lunch
SESSION 3: MANAGING THE NEW DELIVERY/ORDER BOOK
1340 Impact of ship order book post-2010
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Likely supply scenarios for 2009/2010 and beyond
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New build prospects
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Proportion of the order book that is likely to be cancelled, and impact on the dry bulk markets
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Extent to which the order book is financed, and implications for the market
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Impact of changes in the order book on pricing for new and second-hand ships, and availability in the short, medium and longer term
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Anticipated future market structure - capesize, panamax, handy and post-panamax numbers and usage
Susan Oatway, Senior Consultant, Drewry Shipping
1355 The future for current and planned shipyards and impact on the order book
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How are shipyards, shipowners and bankers coping with the global economic development downturn?
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Role of national policies for shipyards - potential to distort the market for shipbuilding, and impact on the order book
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Consequences for the existing order book - scenarios for possible future developments.
Dr Arlie Sterling, President, Marsoft Incorporated
1410 Questions & Answers
SESSION 4: FACING UP TO A NEW MARKET PARADIGM
Chair: Guy Campbell, Managing Director, Dry Cargo, Chartering, Clarksons London
1415 Adapting to a changed landscape in the dry bulk shipping market - A ship-owner's perspective
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Survival of the fittest - to what extent can one protect against counterparty risk?
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The maintenance of long-term relationships in a testing market
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Strategies for the future - establishing a timeframe for renewed business growth
Angelo D'Amato, Managing Director, Perserveranza S.p.A. di Navigazione
1430 Panel: Facing up to the realities of a changed market
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A short-medium term look at the changed market from a producer's perspective
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How does this alter strategic decisions regarding use of freight?
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Negotiating and ensuring long-term sustainability of prices
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Transparency and company structures in shipping today
Niels Wage, Vice President Freight, BHP Billiton Marketing B.V.
Viral Vora, Vice President - Shipping, ArcelorMittal Steel Group
Other companies to be confirmed
1500 Panel: End users' view - Solutions to disputes in current markets
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Initiating and establishing an appropriate medium for negotiations
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A changed relationship - ensuring a reliable exchange of information
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Creative solutions for finding a middle ground and the enforcing decisions
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Working with multiple counterparties to decide what is 'fair'
A Senior Representative, Cargill International SA
Other end-users to be confirmed
1525 Networking Break
SESSION 5: RISK MANAGEMENT
Chair: John Banaszkiewicz, Managing Director, Freight Investor Services Limited
1545 Chair's opening remarks
1555 Managing credit risks in today's volatile shipping markets
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Credit risk assessment, measurement and management
Bimal Kumar, Credit Risk Analyst, RWE Supply & Trading Gmbh
1610 Risk management procedures and good practice in today's shipping markets
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Value at risk
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Counterpart at risk
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Cashflow at risk
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Key considerations when setting up an effective and efficient risk management system
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Using FFAs effectively
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Benefits of a strong risk management system on the overall business
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Availability of tools to assist in risk management
Michael Gaylard, Strategic Director, Freight Investor Services Limited
1625 Clearing and netting as risk management tools for the dry bulk shipping markets
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Regulating the markets for freight derivatives
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Role of clearing in facilitating effective risk management
Isabella Kurek-Smith, Director, Head of Energy and Freight Markets Commercial Services, LCH.Clearnet Limited
1640 Discussion Forum
The discussion forum for the risk management session will address the ongoing credit crisis in the shipping markets. Our speakers will discuss key risk management techniques and how to identify which counterparties may present credit challenges going forward. They will also review the use of netting and clearing as risk management techniques and give up to the minute advice on good risk management procedures to protect your business in a challenging global environment.
1700 Chair's closing remarks and close of Day 1, followed by Networking Drinks Reception
DAY TWO – WEDNESDAY 1 JULY 2009
0800 Morning coffee
0845 Welcome and opening remarks
Sarah Robertson, Conference Producer, Coaltrans Conferences
SESSION 6: FUTURE DEVELOPMENT OF THE FFA MARKETS
0900 What can FFAs offer in today’s market?
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Current position of the Baltic Dry Index and review of liquidity
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Using FFAs in your recovery strategy
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Impact of FFAs on the physical market…Real or imagined, problem or benefit?
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FFAs as a potential solution to credit issues in the physical market
Jeremy Penn, Chief Executive, The Baltic Exchange
0915 The impact of a centralised screen for the FFA market
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Ownership contentions – to whom would the data/ platforms belong?
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Advantages and challenges of using screen trading for FFAs
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Price transparency and liquidity
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Scenarios – timeframe for the introduction of a centralised trading screen
Duncan Dunn, Senior Director and Business Development Manager, SSY Futures
0930 An FFA user’s perspective on the market
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The pros and cons of using FFAs for a physical market player
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The drop in the market – how this has impacted on the use of FFAs and the strategy going forward
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Risk management challenges
Mark Jackson, Director, A. M Nomikos & Son
0945 Growth of hybrid deals - Physical and derivatives
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Fixed and floating physical charters explained
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The new path to effective clearing of physical
Alex Gray, CEO, Clarkson Securities Limited
1000 OTC vs Cleared: Where now for the smaller players?
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Is the OTC market dead or just sleeping?
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Pros and cons of the two approaches. Is there a third way?
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The role of banks in the future. Can they adapt to the new world?
Richard Bowler, Director, Citigroup Global Markets
1015 Legal life in OTCs
1030 Discussion Forum
FFAs have been blamed, perhaps unfairly, as being a significant source of the damage inflicted on the market by the economic downturn. To what extent has their use exacerbated the volatility in the market? Should the use of FFAs be more stringently regulated? How will the scope of their use, and the way they are used, change in future? How can physical market operators make better use of FFAs as a risk management tool?
1100 Networking Break
SESSION 7: THE CURRENT AND FUTURE ROLE OF FINANCE IN DRY CARGO MARKETS
1130 Financing the dry bulk industry - Impact of the global economic situation on availability of funds to the shipping markets
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What is the future of ship lending?
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The impact of increased bank regulation on future boom/bust cycles
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The impact of the economic downturn on finance for ships
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How can shipping compete with other industries in raising bank finance?
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Sources of finance that shippers can draw upon
Evan Cohen, Managing Director, Dry Bulk Group, DVB Bank
1145 Investment opportunities in the shipping industry
- Raising funds in 2009
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Investing in distressed shipping assets – the economics and timing
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Our word is our bond – a defunct motto?
Philippe van den Abeele, Managing Director, Castalia Fund Management (UK) Limited
1200 Navigating around independent interests: The financial workout
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Consideration of enforcement/negotiation of contractual obligations - bank perspective/owners' perspective
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Impact of trade creditors
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Impact of companies seeking protection from Courts on ability to negotiate
Mark O'Neil, Partner, Reed Smith LLP
1215 Discussion Forum
The economic climate has meant that many in the shipping industry find themselves in a considerably different financial position to this time last year. In this session, our speakers will discuss fundamental advice on adapting to this changed environment. But certain questions remain: Where do the opportunities in this environment lie? In what areas is money likely to be invested? What is the key advice of financiers for those looking to attract investment?
1245 Networking Lunch
