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Wednesday, 08 January 14
DRY BULK MARKET PROSPECTS LOOKING BRIGHTER DESPITE SLOW START TO THE NEW YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the fact that the dry bulk market's benchmark, the BDI has been on a fall since the start of 2014, ending yesterday's session down to 1,876 points, experts indicate that it's only a matter of time, before a new freight rate rally emerges. After all, the first quarter of each is traditionally the slowest one for the dry bulk market. Among the encouraging signs for the market, emerged by a recent analysis from the world's leading shipbroker and research firm, Clarksons which noted that on 2011-13, total iron ore tonne-mile trade is projected to have grown on average by 5% p.a., and Chinese imports are expected to have accounted for around 60% of the expansion. More recently the second half of 2013 has seen a significant uptick in tonne-mile imports into China. These trends highlight several key drivers.
According to Clarksons, "Chinese steel production has been the most significant influence on global iron ore trade. In October 2013, global steel output totalled 134mt, up 7% y-o-y and 27% since October 2007. In the year to date, China’s steel output made up 49% of the global total. Chinese steel output has driven China’s ore tonne-mile imports, which are projected to have risen 10% p.a. on average in 2011-13 to reach close to 3,400bn tonne-miles in the year to date. The Graph of the Month shows a pick-up in ore tonne-mile imports in 2H 2013, with firm Chinese steel output growth of 13% y-o-y in September. However, steel output is not the only driver. In 2012, China’s output growth fell to around 4%, while ore imports grew 9% to 724mt; low ore prices made the price differential between domestic and international ore more favourable for imports".
Meanwhile, "outside China, steel output growth has generally been falling since 2011, and weak economic conditions in the EU led to a lower out-put. This caused a 4% fall in iron ore imports by the EU in both 2011 and 2012 (to 116mt). However, recently, steel output outside China has improved, and rose 5% y-o-y in October. The beginning of improved economic performance in the EU is expected this year to drive growth in iron ore imports by the EU for the first time since 2009, with imports now projected to grow 4% in full year 2013", the shipbroker noted.
It added that "the supply side is also a significant driver, and its seasonality often has an impact. Weather related issues can limit exports from Australia and Brazil early in the year. Whilst Brazil’s ore exports have grown only slightly in recent years, the long-haul nature of Brazil-China trade often drives tonne-mile import growth later in the year. Seasonal fluctuations led to an 11% q-o-q fall in Chinese tonne-mile imports in Q1 2013. Average Chinese imports from Brazil in August and September were 16% higher than the average in 1H 2013, which drove a Chinese ore import peak to 378bn tonne-miles in Sep-tember.
Of course, in the longer-term tonne-mile trends are also affected by the pattern of iron ore mine expansions. Since 2011, China’s tonne-mile import growth has largely been driven by a 46% growth in short-haul Australian exports. However, by the end of the decade, iron ore tonne-mile trade growth looks increasingly likely to be driven by the ramp up of mining projects further away in Brazil.
So, China’s steel output growth is the critical factor driving iron ore tonne-mile trends. However, other influences, and supply side developments in particular, can clearly be highly significant too", Clarksons concluded.
In a separate analysis, "BIMCO predicted that in the coming weeks, the elevated level of Capesize Time Charter average rates will remain volatile and stay around USD 15,000-30,000 per day. Panamax TC average rates will stay in the region of USD 9,000-16,000 per day. For the Supramax segment, BIMCO forecasts freight rates in the USD 11,000-17,000 per day interval, whereas Handysize rates is expected to stay strong in the region of USD 9,000-12,000 per day.
Meanwhile, in terms of tonnage supply, BIMCO said that "the fleet has now grown by 5.3% (55 million DWT) in 2013 with a further 7 million DWT still set for delivery in 2013. This means the full year fleet growth could hit 6% as the higher freight market has limited demolition activity. Since 1 July, just 6.3 million DWT has left the active fleet on that account.
Fleet growth in the Capesize segment has been going steeply South since the middle of last year, where the segment growth during the previous year reached 20%. Since then, the slow inflow of new tonnage in 2013 has left Capesize fleet growth at just 5% in October 2013. Panamax has been the fastest growing segment in 2013, but at a significantly lower peak level than the Capesize segment. It is more positive now for the Handysize segment, which has seen the fleet decrease in size this year as the demolition of 5.5 million DWT has offset the delivery of 5.3 million DWT.
The slowing trend in fleet growth will continue into next year and has not been wiped out completely by the hefty ordering activity we have witnessed in past two months – 136 new ships with a capacity of 13.3 million DWT. Amongst them were 20 VLOCs, 16 Capesizes and 24 Handysizes. Year-to-date contracting activity stand at 63.2 million DWT, this is on course to become higher for the full year than the combined bulk carrier contracting activity during 2011-2012" it said.
Outlook
For 2014, BIMCO expects that demand growth will range between 4½ and 6%, indicating that such strong growth will outstrip supply and bring about an improvement to the fundamental balance. According to BIMCO's head of shipping analysis, Peter Sand, "coal exports from the US have been growing since 2007. However, after a record-setting year in 2012, the numbers appear to be dwindling. Even though March this year set a record with 12.3 million tons, 7% higher than the record set in June 2012, it is not representative of the whole year. The exported total in the first nine months of 2013 is 7.5%, lower than that of the same time last year. Seen on a broader scale, however, the 2013 numbers are still around 100% higher than they were only 4 years ago. In combination with the long sailing distances that most US coal export routes hold, the trade has established itself as a key element in the market, also in the future" he said.
As such, "in the light of lower domestic demand for coal in the US due to the excess production of cheap gas, BIMCO expects US coal producers to become a mainstay in the Atlantic market. Down the road, we may also see coal exports from US West Coast ports.
Going forward, EIA expect US coal exports to remain elevated in 2014 too. Driven by the increased consumption of gas within the US at the expense of coal, producers opt for exporting to Europe and Asia. However, productions costs in the US require relatively high sales prices, and with coal being abundant, particularly in the Asian region, the potential seems to be capped for the near-term future. Despite slower Chinese GDP growth in 2014, commodity imports could very well stay strong. This is due to the factors of diversity in suppliers, lower commodity prices, and the lower quality of domestically produced iron ore and thermal coal", the report concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Thursday, 09 January 14
CAPESIZE: WEST AUSTRALIA FREIGHT IS NOW DOWN IN THE $8S AND STILL DROPPING - FEARNLEYS
Handy
In the Atlantic we see rates sliding slowly for the start of 2014. Several players cvrd over the holidays and the rate decline was som ...
Thursday, 09 January 14
THE SHIPPING MARKET IN 2013 AND LOOKING FORWARD GLOBAL ECONOMY: STEADY AS SHE GOES UPWARDS - BIMCO
Over the past year, developed economies have gained traction while developing and emerging economies have suffered from slower growth. Despite key e ...
Wednesday, 08 January 14
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS FALL
COALspot.com: In the week ended January 6, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.27 m ...
Wednesday, 08 January 14
THE DRY BULK MARKET HAS LOST SOME OF ITS STEAM THESE PAST COUPLE OF DAYS: INTERMODAL
Chartering (Wet: Softer- / Dry: Softer- )
The Dry Bulk market has lost some of its steam these past couple of days although hires, espe ...
Wednesday, 08 January 14
SHIPPING: THE ABSOLUTE BOTTOM OF THE CYCLE WAS REACHED AND PASSED - GEORGE LAZARIDIS
COALspot.com: To many in the industry 2013 has been the turning point in the market where the absolute bottom of the cycle was reached and passed.
...
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- Leighton Contractors Pty Ltd - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Tamil Nadu electricity Board
- Indian Energy Exchange, India
- Sree Jayajothi Cements Limited - India
- San Jose City I Power Corp, Philippines
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Energy Development Corp, Philippines
- Simpson Spence & Young - Indonesia
- Carbofer General Trading SA - India
- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Energy Link Ltd, New Zealand
- Ambuja Cements Ltd - India
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kideco Jaya Agung - Indonesia
- Bangladesh Power Developement Board
- Minerals Council of Australia
- White Energy Company Limited
- Australian Commodity Traders Exchange
- ASAPP Information Group - India
- Baramulti Group, Indonesia
- IEA Clean Coal Centre - UK
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- SMG Consultants - Indonesia
- Coal and Oil Company - UAE
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- International Coal Ventures Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Marubeni Corporation - India
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Romanian Commodities Exchange
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Maharashtra Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Kobexindo Tractors - Indoneisa
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Rio Tinto Coal - Australia
- Indogreen Group - Indonesia
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Indika Energy - Indonesia
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Bukit Baiduri Energy - Indonesia
- New Zealand Coal & Carbon
- Malabar Cements Ltd - India
- Oldendorff Carriers - Singapore
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Star Paper Mills Limited - India
- Edison Trading Spa - Italy
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Cement Manufacturers Association - India
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Electricity Generating Authority of Thailand
- Cigading International Bulk Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PetroVietnam Power Coal Import and Supply Company
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Indo Tambangraya Megah - Indonesia
- Mintek Dendrill Indonesia
- ICICI Bank Limited - India
- Bhatia International Limited - India
- TeaM Sual Corporation - Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Independent Power Producers Association of India
- Ceylon Electricity Board - Sri Lanka
- OPG Power Generation Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Essar Steel Hazira Ltd - India
- Directorate Of Revenue Intelligence - India
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Kaltim Prima Coal - Indonesia
- Aboitiz Power Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Vizag Seaport Private Limited - India
- Anglo American - United Kingdom
- Deloitte Consulting - India
- Electricity Authority, New Zealand
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Xindia Steels Limited - India
- Pendopo Energi Batubara - Indonesia
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Standard Chartered Bank - UAE
- Singapore Mercantile Exchange
- Siam City Cement - Thailand
- Globalindo Alam Lestari - Indonesia
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- Chettinad Cement Corporation Ltd - India
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Port Waratah Coal Services - Australia
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Formosa Plastics Group - Taiwan
- Power Finance Corporation Ltd., India
- TNB Fuel Sdn Bhd - Malaysia
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Madhucon Powers Ltd - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Manunggal Multi Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- PTC India Limited - India
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- The University of Queensland
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- Indonesian Coal Mining Association
- Chamber of Mines of South Africa
- Samtan Co., Ltd - South Korea
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Central Electricity Authority - India
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- PowerSource Philippines DevCo
- Straits Asia Resources Limited - Singapore
- Medco Energi Mining Internasional
- Antam Resourcindo - Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Mercator Lines Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Trasteel International SA, Italy
- Economic Council, Georgia
- The Treasury - Australian Government
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