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Thursday, 13 February 14
DRY BULK MARKET FACES BETTER PROSPECTS ON THE BACK OF IMPROVING DEMAND AND SUPPLY BALANCE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market has started off the New Year on the "left foot", with the strong finish of 2013 proving to be unsustainable, on the back of low seasonal demand. As a result, freight rates fell across the board, although the Handysize market is still close to a three-year high. In its latest report on the market, issued yesterday, BIMCO said that it believes that "the level of Capesize TC average rates will remain and stay around USD 4,500-10,000 per day. Panamax TC average rates will stay in the region of USD 5,000-11,000 per day. For the Supramax segment, BIMCO forecasts freight rates in the USD 7,000-11,000 per day interval, whereas Handysize rates are expected to stay strong in the region of USD 7,000-9,500 per day".
In his outlook on the market, BIMCO's Chief Shipping Analyst, Mr. Peter Sand noted that "as Q4-2013 was a massively strong quarter, the seasonal slowdown in Q1-2014 is likely to weigh a bit heavier than normally on freight rates. A drop of 8.8% in selected commodity volumes represent a clear seasonal direction in Q1, but if we look a bit further into the remaining three quarters, they all provide a solid rebound in demand. Chinese iron ore imports especially, but also the dry bulk market in general, is trailing off around the Chinese New Year season" he stated.
According to the report, "demand will be lower than in undisrupted months and thermal coal demand begins to ease as the Winter season in the northern hemisphere loses its grip. General shipping of nickel ore and bauxite will be far below normal levels because of the Indonesian ban– this in itself represents a change in demand beyond seasonality. Similar to the trend forecast in BIMCO Reflections 2014, demand will be centred on the major commodities. That trend has already affected Capesize rates in the most brutal way, as earnings have now entered into the sub-USD 10,000 per day zone; a decline of some 75% since early December".
Meanwhile, "in all the other segments volatility is more subdued, and over- and undershooting (up or down) seen to a lesser extent. At the end of January, Handysize tonnage is still earning in excess of USD 10,000 per day on a T/C average. This is a three-year high.
Q1 holds little room for upside, with most focus being on weather related disruptions in e.g. Australia to intrude on normal trading as well as regulatory issues affecting not just Indonesian exports but Columbian coal exports and Indian exports/imports in general, e.g. via export duties. As demand in volumes grew by 5.4% in 2013, the fundamental market balance only improved if slow steaming was applied more extensively. BIMCO believes that was the case, but only marginally. For 2014, an improvement in the market balance is clearly achievable. For it to materialise, owners and operators need to apply slow steaming to at least the same extent as last year. Only by managing the supply side carefully will higher earnings follow in the wake", it was noted.
Supply
In terms of supply, which is equally if not even more crucial to the long term viability of the industry, BIMCO said that "the demolition side of shipping will be amongst the “ones to watch” in 2014. As the order book keeps building up and eventually brings around more newbuild tonnage to cater for demand, owners might consider taking advantage of the strong demolition prices currently available to let go of less efficient ships.
In 2013, 22.2 million DWT was demolished, mostly in the smaller segments. This was 50% below the level of 2012 but considered a strong number, one that is unlikely to be repeated this year. The average age of a scrapped Capesize was 24, whereas the average demolished Handysize vessel was 30 years of age. Going forward, try to consider this as a potential scenario: the current stock of dry bulk shipping capacity equals 728 million DWT. All ships built in 1993 or earlier comprise just 68 million DWT, which is less than 10%. In comparison, taking out all ships beyond the average scrapping age in recent years (29 years), comprises just 20 million DWT. History tells us that is unlikely to happen, especially in a rising market. Thus, BIMCO forecasts 14 million DWT (or 1.9% of the current fleet) will be demolished in 2014. The fleet grew by 40 million DWT net in 2013, equal to 5.9%. BIMCO forecasts that 2014 holds 47 million DWT of newbuild capacity in store, which will be offset by 14 million DWT, leaving the fleet to bring supply growth of 4.5% around. Such a growth rate denotes an 11-year low. 2015 is already set for higher growth rates, so 2014 represents a short temporary dampening of the high growth of the fleet", it was mentioned.
"As regards the orderbook, the number of new Panamax orders has been extremely slim, in 2013 accounting for just 16% of the capacity ordered. This is a clear counterbalancing statement by the industry in response to the high fleet growth seen in that segment in the previous 15 months. Despite new orders for 197 Capesizes and 80 million DWT in total, the size of the dry bulk fleet today means that the orderbook-to-fleet ratio in the Capesize segment and total dry bulk fleet lands at just 20.5% and 20.7% respectively", the report concluded.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 14 April 14
CHINA'S MEASURES TO STIMULATE ECONOMY'S GROWTH COULD OFFER ROOM FOR STABILITY IN SHIPPING MARKETS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Since the outbreak of the 2008-crisis, the shipping industry, in most of its aspects, i.e. dry bulk and tanker markets alike, has been dealing w ...
Sunday, 13 April 14
INDONESIA TO INDIA FREIGHT MARKET DECLINE CONTINUES
COALspot.com: The freight market continued to drop this week and BDI almost touched 1000 points. BDI closed at 1002 points fell 16.85 pct week o ...
Saturday, 12 April 14
HOW DO YOU CALCULATE LOSS OF EARNINGS FOLLOWING A COLLISION? - INCE & CO
KNOWLEDGE TO ELEVATE
The recent case of Astipalaia vs Hanjin Shenzhen [2014] EWHC 120 (Admlty) has revisited the existing case law on asses ...
Friday, 11 April 14
US COAL PRODUCTION IN MARCH INCREASED 9.69% TO 82.6 MMST MONTH ON MONTH
COALspot.com – United States the world's second largest coal producer, produced approximately 19.10 million short tons (mmst) of coal ...
Thursday, 10 April 14
DRY BULK MARKET IS RISING CLAIMS BIMCO - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
Despite the recent fall of the Baltic Dry Index (BDI), when one compares the first quarter of 2014, to similar quarters of the recent past, it i ...
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- Energy Development Corp, Philippines
- Mercator Lines Limited - India
- Interocean Group of Companies - India
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Romanian Commodities Exchange
- Port Waratah Coal Services - Australia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Mintek Dendrill Indonesia
- The State Trading Corporation of India Ltd
- Wood Mackenzie - Singapore
- Rashtriya Ispat Nigam Limited - India
- Ind-Barath Power Infra Limited - India
- Xindia Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- White Energy Company Limited
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- IEA Clean Coal Centre - UK
- Georgia Ports Authority, United States
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Neyveli Lignite Corporation Ltd, - India
- Standard Chartered Bank - UAE
- Meralco Power Generation, Philippines
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Electricity Authority, New Zealand
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Baramulti Group, Indonesia
- Coastal Gujarat Power Limited - India
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Mercuria Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jindal Steel & Power Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- South Luzon Thermal Energy Corporation
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Ambuja Cements Ltd - India
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Carbofer General Trading SA - India
- Heidelberg Cement - Germany
- Oldendorff Carriers - Singapore
- Sinarmas Energy and Mining - Indonesia
- OPG Power Generation Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Videocon Industries ltd - India
- Anglo American - United Kingdom
- Globalindo Alam Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Krishnapatnam Port Company Ltd. - India
- Attock Cement Pakistan Limited
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Coal and Oil Company - UAE
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Planning Commission, India
- Global Green Power PLC Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Thiess Contractors Indonesia
- Leighton Contractors Pty Ltd - Australia
- Banpu Public Company Limited - Thailand
- Goldman Sachs - Singapore
- Kaltim Prima Coal - Indonesia
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Bhatia International Limited - India
- Therma Luzon, Inc, Philippines
- Altura Mining Limited, Indonesia
- Larsen & Toubro Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Coal Council - USA
- Orica Australia Pty. Ltd.
- Indian Energy Exchange, India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Australian Commodity Traders Exchange
- Antam Resourcindo - Indonesia
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- ASAPP Information Group - India
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- Grasim Industreis Ltd - India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Kideco Jaya Agung - Indonesia
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Central Java Power - Indonesia
- Cement Manufacturers Association - India
- Simpson Spence & Young - Indonesia
- San Jose City I Power Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Jaiprakash Power Ventures ltd
- PTC India Limited - India
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Wilmar Investment Holdings
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- LBH Netherlands Bv - Netherlands
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- SN Aboitiz Power Inc, Philippines
- Star Paper Mills Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Bangladesh Power Developement Board
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Gujarat Mineral Development Corp Ltd - India
- Sical Logistics Limited - India
- Trasteel International SA, Italy
- Uttam Galva Steels Limited - India
- Merrill Lynch Commodities Europe
- Kapuas Tunggal Persada - Indonesia
- Manunggal Multi Energi - Indonesia
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Commonwealth Bank - Australia
- Makarim & Taira - Indonesia
- Salva Resources Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Sarangani Energy Corporation, Philippines
- Rio Tinto Coal - Australia
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Marubeni Corporation - India
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Indogreen Group - Indonesia
- Semirara Mining Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Australian Coal Association
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Kumho Petrochemical, South Korea
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vedanta Resources Plc - India
- Indo Tambangraya Megah - Indonesia
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
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