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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, 24 December 13
AUSTRALIAN NEWCASTLE PORT'S WEEKLY COAL EXPORTS UP 11.46% W-W
COALspot.com: In the week ended December 23, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.84 ...
Tuesday, 24 December 13
SGX HAS LAUNCHED FREIGHT FUTURES
COALspot.com: Singapore Exchange (SGX) has announced the launch of freight future yesterday.
According to SGX’s press release, SGX has laun ...
Monday, 23 December 13
API 8 CFR SOUTH CHINA COAL SWAP FOR AVERAGE Q1' 14 CLOSED AT $ 82.80
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery gained 2.97 percept month on month as on Friday 20 December 2013. ...
Sunday, 22 December 13
Q1' 14 DELIVERY COAL SWAPS CLOSING HIGH COMPARED TO Q4' 14 DELIVERY CLOSING
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery gained $ 1.31 pmt month on month on Friday 20 December 2013 ...
Sunday, 22 December 13
QUIET FREIGHT MARKET DUE TO LONG HOLIDAYS
COALspot.com: The market was soft this week with all indices down. However towards second half of the week the futures on segments was firming up.
...
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- IHS Mccloskey Coal Group - USA
- New Zealand Coal & Carbon
- Formosa Plastics Group - Taiwan
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- SMG Consultants - Indonesia
- The University of Queensland
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- Indika Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Thai Mozambique Logistica
- Essar Steel Hazira Ltd - India
- Kaltim Prima Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Banpu Public Company Limited - Thailand
- Borneo Indobara - Indonesia
- Gujarat Sidhee Cement - India
- Attock Cement Pakistan Limited
- Australian Coal Association
- PetroVietnam Power Coal Import and Supply Company
- ASAPP Information Group - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Cement Manufacturers Association - India
- LBH Netherlands Bv - Netherlands
- London Commodity Brokers - England
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- Planning Commission, India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Singapore Mercantile Exchange
- Uttam Galva Steels Limited - India
- Sarangani Energy Corporation, Philippines
- CNBM International Corporation - China
- Aditya Birla Group - India
- Pendopo Energi Batubara - Indonesia
- Heidelberg Cement - Germany
- Bukit Asam (Persero) Tbk - Indonesia
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Global Green Power PLC Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- Eastern Energy - Thailand
- Timah Investasi Mineral - Indoneisa
- Deloitte Consulting - India
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Port Waratah Coal Services - Australia
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Siam City Cement PLC, Thailand
- Bharathi Cement Corporation - India
- Orica Australia Pty. Ltd.
- Karbindo Abesyapradhi - Indoneisa
- Bahari Cakrawala Sebuku - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Meenaskhi Energy Private Limited - India
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Semirara Mining and Power Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- TeaM Sual Corporation - Philippines
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- PTC India Limited - India
- White Energy Company Limited
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Bhoruka Overseas - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Sical Logistics Limited - India
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Ambuja Cements Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Malabar Cements Ltd - India
- Petron Corporation, Philippines
- Thiess Contractors Indonesia
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Leighton Contractors Pty Ltd - Australia
- Bangladesh Power Developement Board
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- Standard Chartered Bank - UAE
- Dalmia Cement Bharat India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Jaiprakash Power Ventures ltd
- CIMB Investment Bank - Malaysia
- Therma Luzon, Inc, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Sinarmas Energy and Mining - Indonesia
- Straits Asia Resources Limited - Singapore
- Altura Mining Limited, Indonesia
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- The Treasury - Australian Government
- Coal and Oil Company - UAE
- Larsen & Toubro Limited - India
- Chamber of Mines of South Africa
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Siam City Cement - Thailand
- Iligan Light & Power Inc, Philippines
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Energy Development Corp, Philippines
- San Jose City I Power Corp, Philippines
- Semirara Mining Corp, Philippines
- Riau Bara Harum - Indonesia
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Ceylon Electricity Board - Sri Lanka
- TNB Fuel Sdn Bhd - Malaysia
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Indian Energy Exchange, India
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Antam Resourcindo - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Madhucon Powers Ltd - India
- Grasim Industreis Ltd - India
- Parliament of New Zealand
- Indo Tambangraya Megah - Indonesia
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Georgia Ports Authority, United States
- Mercuria Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indian Oil Corporation Limited
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- Aboitiz Power Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
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