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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, 13 December 13
DRY BULK SHIPPING TO WITNESS HEALTHY DEMAND MOVING FORWARD - ICS
The Institute of Chartered Shipbrokers Greek Branch organised its 9th Annual Forum at Eugenides Foundation, on Wednesday, 11th of December, with a r ...
Friday, 13 December 13
US PRODUCED APPROXIMATELY 18.4 MILLION SHORT TONS OF COAL W/E 7 DECEMBER 2013
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.4 million short tons (mmst) of coal in ...
Thursday, 12 December 13
GREAT EXPECTATIONS SANCTIONED - EVA TZIMA
News that sanctions on Iranian oil exports could be lifted sometime in the following months have shaken the markets recently. One of the world&rsquo ...
Thursday, 12 December 13
DRY BULK MARKET RATES FOR CAPESIZES TO REMAIN VOLATILE SAYS BIMCO
The dry bulk market has reached multi year highs this week, as the BDI is standing at the 2,300-point mark. In its analysis of the market, BIMCO pre ...
Wednesday, 11 December 13
THE INDONESIAN GOVERNMENT IS CONSIDERING SETTING A REGULATION ON THE MINIMUM PURITY TO REGULATE UNPROCESSED ORE BAN
COALspot.com: Energy and Mineral Resources Minister Jero Wacik recently proposed to house those mining (mineral) companies that had shown a commitme ...
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- Coalindo Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Pipit Mutiara Jaya. PT, Indonesia
- Anglo American - United Kingdom
- Maheswari Brothers Coal Limited - India
- Minerals Council of Australia
- Indian Energy Exchange, India
- Oldendorff Carriers - Singapore
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- McConnell Dowell - Australia
- Central Java Power - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Pendopo Energi Batubara - Indonesia
- Larsen & Toubro Limited - India
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- Medco Energi Mining Internasional
- Rio Tinto Coal - Australia
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- IEA Clean Coal Centre - UK
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Agrawal Coal Company - India
- PTC India Limited - India
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Indika Energy - Indonesia
- VISA Power Limited - India
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Ministry of Mines - Canada
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Merrill Lynch Commodities Europe
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Kobexindo Tractors - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Ambuja Cements Ltd - India
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- White Energy Company Limited
- Iligan Light & Power Inc, Philippines
- Bulk Trading Sa - Switzerland
- Directorate General of MIneral and Coal - Indonesia
- LBH Netherlands Bv - Netherlands
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Siam City Cement PLC, Thailand
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Uttam Galva Steels Limited - India
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- International Coal Ventures Pvt Ltd - India
- Romanian Commodities Exchange
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- GVK Power & Infra Limited - India
- ICICI Bank Limited - India
- Borneo Indobara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Tamil Nadu electricity Board
- Banpu Public Company Limited - Thailand
- Commonwealth Bank - Australia
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Australian Coal Association
- Meralco Power Generation, Philippines
- European Bulk Services B.V. - Netherlands
- Mintek Dendrill Indonesia
- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sojitz Corporation - Japan
- New Zealand Coal & Carbon
- The University of Queensland
- Billiton Holdings Pty Ltd - Australia
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Videocon Industries ltd - India
- Savvy Resources Ltd - HongKong
- Georgia Ports Authority, United States
- Meenaskhi Energy Private Limited - India
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Gujarat Sidhee Cement - India
- Parliament of New Zealand
- Petron Corporation, Philippines
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Madhucon Powers Ltd - India
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Australian Commodity Traders Exchange
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- CIMB Investment Bank - Malaysia
- Star Paper Mills Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Deloitte Consulting - India
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Semirara Mining Corp, Philippines
- Malabar Cements Ltd - India
- Manunggal Multi Energi - Indonesia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Thiess Contractors Indonesia
- Jindal Steel & Power Ltd - India
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Sarangani Energy Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Ministry of Transport, Egypt
- Therma Luzon, Inc, Philippines
- SMC Global Power, Philippines
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kapuas Tunggal Persada - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Independent Power Producers Association of India
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- Bangladesh Power Developement Board
- SMG Consultants - Indonesia
- Marubeni Corporation - India
- GAC Shipping (India) Pvt Ltd
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- GMR Energy Limited - India
- CNBM International Corporation - China
- Coal and Oil Company - UAE
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
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