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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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Tuesday, 07 January 14
INDONESIA RAISES COAL PRICE THIS MONTH
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 1.59 / MT ...
Tuesday, 07 January 14
NEWCASTLE COAL TERMINAL'S COAL EXPORTS SLIDE TO 3.54 MMT W/E 30 DECEMBER 13
COALspot.com: In the week ended December 30, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.54 ...
Tuesday, 07 January 14
US COAL OUTPUT SLIDES 9 PCT WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.8 million short tons (mmst) of coal in ...
Monday, 06 January 14
ARGUS LAUNCHES SPOT CFR EAST COAST INDIA COAL ASSESSMENTS
COALspot.com: Global energy and commodity news and price reporting agency Argus has announced today that, the company has launched CFR coal assessme ...
Monday, 06 January 14
INDONESIAN COAL SWAPS SLIDE TO $ 61.25 FOR Q4' 14 DELIVERY
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.32 pmt month on month on Friday 3 January 2014. Th ...
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- Aditya Birla Group - India
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Billiton Holdings Pty Ltd - Australia
- Interocean Group of Companies - India
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- The University of Queensland
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- Edison Trading Spa - Italy
- Trasteel International SA, Italy
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Central Electricity Authority - India
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Leighton Contractors Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
- Binh Thuan Hamico - Vietnam
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Wilmar Investment Holdings
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- SN Aboitiz Power Inc, Philippines
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- ASAPP Information Group - India
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- Indogreen Group - Indonesia
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- White Energy Company Limited
- VISA Power Limited - India
- Bhushan Steel Limited - India
- Karaikal Port Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Neyveli Lignite Corporation Ltd, - India
- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Karbindo Abesyapradhi - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Central Java Power - Indonesia
- Essar Steel Hazira Ltd - India
- Siam City Cement - Thailand
- Energy Link Ltd, New Zealand
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- Lanco Infratech Ltd - India
- Bangladesh Power Developement Board
- Merrill Lynch Commodities Europe
- Romanian Commodities Exchange
- Jindal Steel & Power Ltd - India
- PTC India Limited - India
- Timah Investasi Mineral - Indoneisa
- Ambuja Cements Ltd - India
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Africa Commodities Group - South Africa
- Carbofer General Trading SA - India
- Gujarat Mineral Development Corp Ltd - India
- Globalindo Alam Lestari - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Holcim Trading Pte Ltd - Singapore
- Chamber of Mines of South Africa
- Vedanta Resources Plc - India
- Global Coal Blending Company Limited - Australia
- Sojitz Corporation - Japan
- Meenaskhi Energy Private Limited - India
- Thai Mozambique Logistica
- International Coal Ventures Pvt Ltd - India
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Attock Cement Pakistan Limited
- Petron Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Singapore Mercantile Exchange
- Bhatia International Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- The State Trading Corporation of India Ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Salva Resources Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Straits Asia Resources Limited - Singapore
- Deloitte Consulting - India
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Jaiprakash Power Ventures ltd
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Finance - Indonesia
- PNOC Exploration Corporation - Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Bharathi Cement Corporation - India
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Energy Development Corp, Philippines
- Ministry of Mines - Canada
- Sical Logistics Limited - India
- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Orica Australia Pty. Ltd.
- Maheswari Brothers Coal Limited - India
- Iligan Light & Power Inc, Philippines
- Eastern Energy - Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Uttam Galva Steels Limited - India
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Bhoruka Overseas - Indonesia
- Grasim Industreis Ltd - India
- Electricity Generating Authority of Thailand
- Independent Power Producers Association of India
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Posco Energy - South Korea
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- TeaM Sual Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Parliament of New Zealand
- Xindia Steels Limited - India
- Indika Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Miang Besar Coal Terminal - Indonesia
- Ceylon Electricity Board - Sri Lanka
- GMR Energy Limited - India
- PowerSource Philippines DevCo
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- London Commodity Brokers - England
- Banpu Public Company Limited - Thailand
- Marubeni Corporation - India
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- Tamil Nadu electricity Board
- Mercuria Energy - Indonesia
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Standard Chartered Bank - UAE
- Tata Chemicals Ltd - India
- New Zealand Coal & Carbon
- Bahari Cakrawala Sebuku - Indonesia
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- ICICI Bank Limited - India
- The Treasury - Australian Government
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