Swot Analysis Of Capesize

It is commonly accepted that the marine industry plays an important role in international trade. In fact, one third of worldwide trade is done by sea. The reason for that is the efficiency the efficiency of transportation of products it offers, both in quantity carried at a time, as well as the time matters. The contribution to international trade from dry bulk carriers was 4 billion tons just for this year, making this type of trade very useful for the global economy. Dry products are transferred in bulk by many types of carriers, with the largest being the Capesize ones. They usually range between 150,000 and 200,000 DWT which makes their access limited to most ports and canals, such as the Panama Canal and until recently the Suez Canal.

It seems that the capesize dry bulk market is highly driven by the global economy’s state at any moment. Because the commodities handled by capesize vessels are a base for international trade. So, if these majorly traded products face a drop in production and demand, so will the capesize market. It is important to note that major importers shift the market in general, as well as the capesize. China, the world’s largest importer of mostly iron ore and coal can solely change the global economy, depending on their demand. The reason for such a high demand for those commodities is the country’s interest in investing in infrastructure () as well as the production of steel for shipyard use. This shows an important aspect in the co dependence of the dry bulk trade and the international trade and the supply/demand motif of the

To benefit from the above-mentioned economies of scale in the iron ore trade, in 2011 and early 2012 the Brazilian mining conglomerate Vale took delivery of the largest existing cargo carrying ships, the so- called Valemax ships of up to 400,000 dwt capacity.2 The ships created a difficult situation for Vale, however, as permission for them to enter Chinese ports was still under discussion with Chinese authorities. Reportedly, Chinese shipowners and iron ore producers opposed the entry of the Brazilian Valemax ships into Chinese ports, arguing that the operation of such large ships might not be safe, and fearing that Vale could gain monopolistic control of the supply chain for iron ore. Ports would also need to expand stockpiling capacity to store the imported ore. Vale is planning to take delivery of 35 such ships by the end of 2013, with a total investment of $4.2 billion. The Valemax ships are built in shipyards in the Republic of Korea and in China. Keeping in mind the benefits of lower transport costs, energy efficiency and further South-South trade and collaboration between Brazil and China, several industry observers expressed hope that the ban for Valemax ships to enter Chinese ports would soon be lifted. History has shown, however, that attempts by exporters