Price formation of dry bulk carriers in the Chinese shipbuilding industry

Jiang, Liping; Lauridsen, Jørgen

doi:10.1080/03088839.2012.671544

Cited by 12 publications

(7 citation statements)

References 19 publications

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“…Mulligan (2008) presented a simple econometric model to estimate the newbuilding vessel cost in the dry bulk market. Jiang and Lauridsen (2012) employed component principal analysis to solve the multi-collinearity and indicated that the time charter rate has the most significant positive impact on Chinese newbuilding ship price. Some other unique ''China Factors'' were identified to explain the results.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Previous studies on ship price just mainly focus on modeling the level of ship prices (both newbuilding and secondhand), such as Charemza and Gronicki (1981), Beenstock and Vergottis (1989), Stopford (1988), Lun and Quaddus (2009), Tsolakis et al (2003), and Jiang and Lauridsen (2012). Some have paid attention to the volatile characteristics of secondhand price in bulk markets, Kavussanos (1997) realized the uncertainty in secondhand vessel price played an important role in asset management and investment decision-making.…”

Section: Introductionmentioning

confidence: 98%

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Volatility transmission in the dry bulk newbuilding and secondhand markets: an empirical research

Dai

Chen

et al. 2014

Transportation Letters

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Dry bulk market is an important element of world trade. Newbuilding and secondhand vessel prices tend to fluctuate drastically, however the volatility mechanism between the two markets have been largely ignored. This paper is the first to investigate the volatility transmission effect between the two markets with the bivariate GARCH model. The empirical results revealed that volatility spillover was from newbuilding to secondhand market in capesize, panamax, and handymax sectors, while volatility transferred from secondhand to newbuilding market in handysize sector. Besides, some bidirectional effects were found in the dry bulk market that lagged variances and could affect the current variance in a counterpart market, regardless of the volatility transmission. The findings could help the investors to better understanding the market dynamics and risk management.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 98%

Volatility transmission in the dry bulk newbuilding and secondhand markets: an empirical research

Dai

Chen

et al. 2014

Transportation Letters

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“…The contracting activity of new ships as well as the prices of new buildings indicate the state of the shipbuilding industry [12]. Although the prices of new ships differ with regard to various factors, Clarkson's Index indicates the total price movement of the new buildings with upward trend [16].…”

Section: The World's Shipbuilding and Newbuilding Pricesmentioning

confidence: 99%

Global shipbuilding activities in the modern maritime market environment

et al. 2020

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The international trade, in the long run being influenced primarily by global economy, is hardly imaginable without maritime transport of goods. The investors in the shipping market, i.e. shipowners, foresee the key return of their capital investments through collection of the freight payments. Consequently, the position and ultimately survival of the owners is intensely influenced with the freight rate cycles, which in turn depend on demand and supply of ships. As historically proved, the higher the freight rates, the more orders for new ships are secured by shipyards. Most of the factors that impact shipowners’ decisions, especially those related to placing the orders, thus extend their influence towards shipyards’ operations and earnings. Competition among shipyards to ever attract more shipowners and secure more new orders or higher value orders, results in expanding their facilities, shortening delivery dates, making their ships’ design more appealing, lowering prices, etc. Observing fluctuations of the market and understanding impact factors on the freight rates’ segment and on shipbuilding segment therefore, is a crucial occupation accompanying executive decision making process for both, shipbuilders and shipowners. Recent state of the global shipbuilding industry is presented in this paper, based on the most recently available data on shipping market and on the global shipbuilding activities. Near-future outlook is given through analysis of the current market developments and industry potentials as well as with respect to the rivalry among competitors. Besides, clarification of market present state’s impact factors is herein given and significant conclusions for their current development and future perspectives are addressed, considering available information.

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“…His main conclusion is that if the shipbuilding in a country is largely navy related, the impact of the crisis is reduced. Jiang and Lauridsen (2012) focused on the price forming of yards and its dependence on the time charter (TC) rates; other variables are cost price, capacity and profit margin. Pruyn (2013) also showed that price is mostly dependant on TC rates, and used proxies for cost price, capacity and size.…”

Section: The 2009 Crisis In Shippingmentioning

confidence: 99%

Are the new fuel-efficient bulkers a threat to the old fleet?

Pruyn

2017

MABR

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Purpose The purpose of this paper is to investigate whether the headlined eco-bulkers ordered in 2012 and 2013 are posing a threat to the less-efficient ships ordered at the end of the boom in 2008 and 2009. Design/methodology/approach This paper will first investigate the drivers for the interest in such low-emission, low-speed bulker as well as the more general history of bulker designs. This is followed by a study on the vessels delivered between 2005 and 2014, based on eight parameters representing fuel efficiency, speed and hydromechanics properties. Within these results, evidence is sought for a significant change in the qualities of the vessels delivered after the last boom. Findings The data showed that at least till present, no significant changes could be discovered between 2014 and the earlier years. This indicates that either because of the long delivery times at the end of the boom, such vessels are still to be delivered, or that they were not ordered in an amount large enough to change the trend. For the future, this fact and the changes in vessel design resulting from the introduction of the energy efficiency design index (EEDI) in 2017 and the large fluctuations in the fuel prices will be interesting to keep monitoring the developments in the eight studied parameters. Originality/value This paper extends (in time) and improves (number of variables studied) a number of earlier studies on average qualities of the world fleet. It studies both the composition and the changes in average properties of the ships produced each year. It allowed the author to discover and explain the trends that would not have been evident when studying ships as single units or as the result of a business opportunity optimisation. Most important of which is the fact that, on average, ships produced are optimised for the current economic conditions and are not taken into consideration for future trends and scenarios.

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Price formation of dry bulk carriers in the Chinese shipbuilding industry

Cited by 12 publications

References 19 publications

Volatility transmission in the dry bulk newbuilding and secondhand markets: an empirical research

Volatility transmission in the dry bulk newbuilding and secondhand markets: an empirical research

Global shipbuilding activities in the modern maritime market environment

Are the new fuel-efficient bulkers a threat to the old fleet?

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