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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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Friday, 27 December 13
THE EXPORT OF UNPROCESSED MINERALS WOULD NOT BE ALLOWED AFTER 12 JAN 2014 - INDONESIAN ENERGY MINISTER
COALspot.com: The government of Indonesia will implement Law No. 4 of 2009 on Mineral and Coal in full and consistently by January 12, 2014, said, m ...
Friday, 27 December 13
INDONESIA SHIPPED 15.75 PERCENT MORE COAL IN NOVEMBER
COALspot.com: Indonesia, the world's 4th largest coal producer and the largest multi grade coal exporter shipped over $2* billion worth of co ...
Thursday, 26 December 13
COAL & OIL GROUP SECURES US$ 250 MILLION FUNDING FOR ITS 1200MW THERMAL POWER PLANT IN INDIA
COALspot.com: Dubai-based Coal & Oil (C&O) Group has announced that it has secured additional funding of approximately Dhs. 1 billion (appro ...
Wednesday, 25 December 13
DRY BULK INDEX LOST SOME GROUND THIS PAST WEEK - INTERMODAL
Chartering (Wet: Firm+ / Dry: Softer - )
The Dry Bulk Index lost some ground this past week, on the back of activity slowing down befor ...
Wednesday, 25 December 13
SHIPPING : AS FAR AS THIS CYCLE IS CONCERNED, 'WE HAVE SEEN THE WORST....!' - JOHN N. COTZIAS
In a week’s time the year comes to an end. Having been a speaker in two seminars over the past 5 days I was able to see the year ending trends ...
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- Chamber of Mines of South Africa
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Bangladesh Power Developement Board
- SN Aboitiz Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Samtan Co., Ltd - South Korea
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Ind-Barath Power Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- SMC Global Power, Philippines
- ASAPP Information Group - India
- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Xindia Steels Limited - India
- Power Finance Corporation Ltd., India
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Marubeni Corporation - India
- Formosa Plastics Group - Taiwan
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Intertek Mineral Services - Indonesia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Essar Steel Hazira Ltd - India
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Aditya Birla Group - India
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- CIMB Investment Bank - Malaysia
- Global Green Power PLC Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Tamil Nadu electricity Board
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Siam City Cement - Thailand
- White Energy Company Limited
- Maheswari Brothers Coal Limited - India
- Timah Investasi Mineral - Indoneisa
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Altura Mining Limited, Indonesia
- Medco Energi Mining Internasional
- Borneo Indobara - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Metalloyd Limited - United Kingdom
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Leighton Contractors Pty Ltd - Australia
- Neyveli Lignite Corporation Ltd, - India
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GVK Power & Infra Limited - India
- Vedanta Resources Plc - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- New Zealand Coal & Carbon
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Vijayanagar Sugar Pvt Ltd - India
- Thiess Contractors Indonesia
- Kumho Petrochemical, South Korea
- IHS Mccloskey Coal Group - USA
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Australian Commodity Traders Exchange
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Independent Power Producers Association of India
- OPG Power Generation Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Miang Besar Coal Terminal - Indonesia
- Romanian Commodities Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Renaissance Capital - South Africa
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Deloitte Consulting - India
- Indian Oil Corporation Limited
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- PTC India Limited - India
- Sree Jayajothi Cements Limited - India
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Kobexindo Tractors - Indoneisa
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Energy Link Ltd, New Zealand
- CNBM International Corporation - China
- TeaM Sual Corporation - Philippines
- IEA Clean Coal Centre - UK
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Petron Corporation, Philippines
- Carbofer General Trading SA - India
- Meralco Power Generation, Philippines
- Posco Energy - South Korea
- Riau Bara Harum - Indonesia
- Jindal Steel & Power Ltd - India
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Krishnapatnam Port Company Ltd. - India
- Kartika Selabumi Mining - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Coastal Gujarat Power Limited - India
- Edison Trading Spa - Italy
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Videocon Industries ltd - India
- Siam City Cement PLC, Thailand
- Billiton Holdings Pty Ltd - Australia
- Eastern Coal Council - USA
- Cement Manufacturers Association - India
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Makarim & Taira - Indonesia
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- Aboitiz Power Corporation - Philippines
- Wilmar Investment Holdings
- Bukit Baiduri Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sojitz Corporation - Japan
- Central Electricity Authority - India
- Wood Mackenzie - Singapore
- Dalmia Cement Bharat India
- Madhucon Powers Ltd - India
- Ministry of Transport, Egypt
- Orica Australia Pty. Ltd.
- Globalindo Alam Lestari - Indonesia
- McConnell Dowell - Australia
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