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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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- Directorate Of Revenue Intelligence - India
- San Jose City I Power Corp, Philippines
- Romanian Commodities Exchange
- Vedanta Resources Plc - India
- Coal and Oil Company - UAE
- Grasim Industreis Ltd - India
- Ministry of Mines - Canada
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Indian Energy Exchange, India
- Bharathi Cement Corporation - India
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Power Finance Corporation Ltd., India
- Semirara Mining and Power Corporation, Philippines
- Tamil Nadu electricity Board
- Australian Commodity Traders Exchange
- Attock Cement Pakistan Limited
- Africa Commodities Group - South Africa
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Indika Energy - Indonesia
- Merrill Lynch Commodities Europe
- Chamber of Mines of South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Formosa Plastics Group - Taiwan
- Aditya Birla Group - India
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Coal Association
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Kobexindo Tractors - Indoneisa
- PTC India Limited - India
- Sojitz Corporation - Japan
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Mercator Lines Limited - India
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- GVK Power & Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- India Bulls Power Limited - India
- Eastern Energy - Thailand
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Larsen & Toubro Limited - India
- Ministry of Transport, Egypt
- Interocean Group of Companies - India
- Kartika Selabumi Mining - Indonesia
- Toyota Tsusho Corporation, Japan
- Minerals Council of Australia
- CNBM International Corporation - China
- Globalindo Alam Lestari - Indonesia
- Energy Link Ltd, New Zealand
- Bhushan Steel Limited - India
- Sinarmas Energy and Mining - Indonesia
- Barasentosa Lestari - Indonesia
- Eastern Coal Council - USA
- Trasteel International SA, Italy
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Siam City Cement PLC, Thailand
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Krishnapatnam Port Company Ltd. - India
- Siam City Cement - Thailand
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Petron Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Sree Jayajothi Cements Limited - India
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Renaissance Capital - South Africa
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Intertek Mineral Services - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Global Coal Blending Company Limited - Australia
- Vizag Seaport Private Limited - India
- Billiton Holdings Pty Ltd - Australia
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Timah Investasi Mineral - Indoneisa
- Karbindo Abesyapradhi - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Sical Logistics Limited - India
- Riau Bara Harum - Indonesia
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- GN Power Mariveles Coal Plant, Philippines
- Bukit Makmur.PT - Indonesia
- Medco Energi Mining Internasional
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- Mjunction Services Limited - India
- Indogreen Group - Indonesia
- Central Electricity Authority - India
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Indonesian Coal Mining Association
- Uttam Galva Steels Limited - India
- Jaiprakash Power Ventures ltd
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- GMR Energy Limited - India
- AsiaOL BioFuels Corp., Philippines
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Savvy Resources Ltd - HongKong
- Economic Council, Georgia
- ASAPP Information Group - India
- Borneo Indobara - Indonesia
- Kideco Jaya Agung - Indonesia
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- White Energy Company Limited
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Malabar Cements Ltd - India
- Posco Energy - South Korea
- Bhatia International Limited - India
- Straits Asia Resources Limited - Singapore
- Central Java Power - Indonesia
- Salva Resources Pvt Ltd - India
- The University of Queensland
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