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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, 11 December 13
BDI REACHED A PEAK OF YEAR RECORD OF 2,237 POINTS WHICH IS A SIGNIFICANT CHANGE IN MARKET CONDITIONS
Getting closer to the end of 2013, it is important that we have a review of the course the market has taken these past 12 months by looking at the B ...
Tuesday, 10 December 13
HNL, AN INDIAN STATE-OWNED NEWSPRINT PAPER MAKER SEEKS 50K TONS OF INDONESIAN 5600 COAL
COALspot.com: Hindustan Newsprint limited (HNL), an Indian state owned news print paper producer invited bids to supply 50,000MT of min 5,200kcal/kg ...
Tuesday, 10 December 13
COLOMBIAN THERMAL COAL EXPORTS SLIPPED 25.54% M-M IN OCTOBER'13
COALspot.com: Colombia's Thermal coal exports in October dropped 25.54% month on month to 5,990,815.13 million mt, according to data from mining de ...
Tuesday, 10 December 13
NEWCASTLE COAL EXPORTS PLUNGE W-O-W
COALspot.com: In the week ended December 9, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2.50 ...
Monday, 09 December 13
SOUTH AFRICA'S RICHARDS BAY COAL EXPORTS IN NOVEMBER DECLINED 14.43% M-M
COALspot.com: South Africa's Richards Bay coal terminal exported 6.224 million tonnes of coal in November, declining by 1.05 million tons from the ...
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- Neyveli Lignite Corporation Ltd, - India
- Billiton Holdings Pty Ltd - Australia
- Ministry of Mines - Canada
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Wood Mackenzie - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Mercator Lines Limited - India
- Kartika Selabumi Mining - Indonesia
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Marubeni Corporation - India
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Timah Investasi Mineral - Indoneisa
- Malabar Cements Ltd - India
- Karaikal Port Pvt Ltd - India
- The Treasury - Australian Government
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Parliament of New Zealand
- Singapore Mercantile Exchange
- Minerals Council of Australia
- CIMB Investment Bank - Malaysia
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Interocean Group of Companies - India
- CNBM International Corporation - China
- Jindal Steel & Power Ltd - India
- Jaiprakash Power Ventures ltd
- VISA Power Limited - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Medco Energi Mining Internasional
- Sojitz Corporation - Japan
- Maheswari Brothers Coal Limited - India
- Planning Commission, India
- Energy Development Corp, Philippines
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Directorate Of Revenue Intelligence - India
- Carbofer General Trading SA - India
- Ministry of Transport, Egypt
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Trasteel International SA, Italy
- Meenaskhi Energy Private Limited - India
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Petron Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Sree Jayajothi Cements Limited - India
- South Luzon Thermal Energy Corporation
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Sical Logistics Limited - India
- The University of Queensland
- ICICI Bank Limited - India
- Orica Mining Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Indian Energy Exchange, India
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Ambuja Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Larsen & Toubro Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Australian Coal Association
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Heidelberg Cement - Germany
- Siam City Cement - Thailand
- Barasentosa Lestari - Indonesia
- Intertek Mineral Services - Indonesia
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- Salva Resources Pvt Ltd - India
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Thai Mozambique Logistica
- Bharathi Cement Corporation - India
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Metalloyd Limited - United Kingdom
- Gujarat Mineral Development Corp Ltd - India
- Manunggal Multi Energi - Indonesia
- Ministry of Finance - Indonesia
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Alfred C Toepfer International GmbH - Germany
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Xindia Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- ASAPP Information Group - India
- Sarangani Energy Corporation, Philippines
- Indonesian Coal Mining Association
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- IHS Mccloskey Coal Group - USA
- Africa Commodities Group - South Africa
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Meralco Power Generation, Philippines
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Power Finance Corporation Ltd., India
- Romanian Commodities Exchange
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Dalmia Cement Bharat India
- Asmin Koalindo Tuhup - Indonesia
- Australian Commodity Traders Exchange
- San Jose City I Power Corp, Philippines
- Savvy Resources Ltd - HongKong
- Kobexindo Tractors - Indoneisa
- Kaltim Prima Coal - Indonesia
- PowerSource Philippines DevCo
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Globalindo Alam Lestari - Indonesia
- Indo Tambangraya Megah - Indonesia
- Eastern Coal Council - USA
- Banpu Public Company Limited - Thailand
- Miang Besar Coal Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- Cigading International Bulk Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Kideco Jaya Agung - Indonesia
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Commonwealth Bank - Australia
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Holcim Trading Pte Ltd - Singapore
- Bhushan Steel Limited - India
- Formosa Plastics Group - Taiwan
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