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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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Wednesday, 01 January 14
DRY BULK CARRIER OWNERS ANTICIPATING AN EVEN STRONGER 2014 YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
To begin with, The Hellenic Shipping News Worldwide team would like to wish you all a Happy and Prosperous 2014! We begin the New Year with our firs ...
Tuesday, 31 December 13
INDONESIA'S COAL PRODUCTION COULD HIT 450 MMT IN 2014 - ICMA
COALspot.com: Indonesia, the fourth largest coal producer and largest coal exporter in the world, to increase coal output in year 2014 instead of th ...
Tuesday, 31 December 13
U.S. COAL PRODUCTION INCREASED WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.5 million short tons (mmst) of coal in ...
Tuesday, 31 December 13
MORE THAN $21 BILLION INVESTED IN SECOND HAND SHIP PURCHASES IN 2013
One thing that was apparent in the sale and purchasing markets during 2013 was the ship owners' larger appetite for vessel acquisitions, as most so ...
Monday, 30 December 13
INDONESIAN COAL TO BE PART OF INDEX DETERMINING POWER TARIFFS - BUSINESS STANDARD
In a significant move, power sector regulator CERC has decided to provide 50 per cent weightage for Indonesian coal in the benchmark index that is u ...
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- Jaiprakash Power Ventures ltd
- Marubeni Corporation - India
- Price Waterhouse Coopers - Russia
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Orica Mining Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Coastal Gujarat Power Limited - India
- Malabar Cements Ltd - India
- Planning Commission, India
- Eastern Coal Council - USA
- Thiess Contractors Indonesia
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Petron Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Commodity Traders Exchange
- Wood Mackenzie - Singapore
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- MS Steel International - UAE
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Metalloyd Limited - United Kingdom
- Sarangani Energy Corporation, Philippines
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Straits Asia Resources Limited - Singapore
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- International Coal Ventures Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Parliament of New Zealand
- Star Paper Mills Limited - India
- New Zealand Coal & Carbon
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Leighton Contractors Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Deloitte Consulting - India
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Ministry of Finance - Indonesia
- Larsen & Toubro Limited - India
- Parry Sugars Refinery, India
- White Energy Company Limited
- Cigading International Bulk Terminal - Indonesia
- The Treasury - Australian Government
- GN Power Mariveles Coal Plant, Philippines
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- CNBM International Corporation - China
- Bayan Resources Tbk. - Indonesia
- Jindal Steel & Power Ltd - India
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- GVK Power & Infra Limited - India
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- The University of Queensland
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- Banpu Public Company Limited - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- Videocon Industries ltd - India
- Indian Energy Exchange, India
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Energy Link Ltd, New Zealand
- Energy Development Corp, Philippines
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Romanian Commodities Exchange
- Power Finance Corporation Ltd., India
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Barasentosa Lestari - Indonesia
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Binh Thuan Hamico - Vietnam
- Manunggal Multi Energi - Indonesia
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Semirara Mining Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- IHS Mccloskey Coal Group - USA
- Bahari Cakrawala Sebuku - Indonesia
- Goldman Sachs - Singapore
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Asam (Persero) Tbk - Indonesia
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Neyveli Lignite Corporation Ltd, - India
- Dalmia Cement Bharat India
- Tamil Nadu electricity Board
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- PetroVietnam Power Coal Import and Supply Company
- Lanco Infratech Ltd - India
- Tata Chemicals Ltd - India
- Interocean Group of Companies - India
- Port Waratah Coal Services - Australia
- SMG Consultants - Indonesia
- Chamber of Mines of South Africa
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- European Bulk Services B.V. - Netherlands
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Kepco SPC Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kalimantan Lumbung Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Wilmar Investment Holdings
- Central Electricity Authority - India
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Renaissance Capital - South Africa
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Savvy Resources Ltd - HongKong
- Jorong Barutama Greston.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
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