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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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Friday, 21 March 14
MERCURIA ANNOUNCES ACQUISITION OF J.P. MORGAN PHYSICAL COMMODITIES BUSINESS
COALspot.com: Mercuria Energy Group announced that it has reached a definitive agreement with J.P. Morgan Chase & Co. to acquire its physica ...
Thursday, 20 March 14
CAPESIZE: WEST AUSTRALIA TO CHINA RATES HAVE CLIMBED BACK TOWARD USD 11 PMT - FEARNRESEARCH
Handy
From a slight improvement in the Atlantic to a more mixed picture this mid week. North Atlantic rounds showing softening signs whereas S ...
Wednesday, 19 March 14
INSTEAD OF DECIDING WHETHER THE GLASS IS HALF FULL OR HALF EMPTY, I AM CURRENTLY GLAD THERE IS WATER IN THE GLASS - EVA TZIMA
By Eva Tzima
Research Analyst
Intermodal Research & Valuations
Right when you think that you have all your facts straight, right wh ...
Wednesday, 19 March 14
EUROCOKE SUMMIT 2014
Press Release: ThyssenKrupp, Steel Institute VDEh, SSI and more headline Smithers Apex’s Eurocoke Summit
The leading coke, coal and s ...
Wednesday, 19 March 14
DRY BULK MARKET REBOUND LEADS TO MORE NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The steady rise of the dry bulk market, as evidenced by the return, yesterday, of the Baltic Dry Index above the 1,500-point mark (1,518), is fu ...
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- Mjunction Services Limited - India
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Marubeni Corporation - India
- European Bulk Services B.V. - Netherlands
- Kepco SPC Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Parliament of New Zealand
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- Borneo Indobara - Indonesia
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Commonwealth Bank - Australia
- Heidelberg Cement - Germany
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Larsen & Toubro Limited - India
- Anglo American - United Kingdom
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Kideco Jaya Agung - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Mercuria Energy - Indonesia
- Parry Sugars Refinery, India
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Minerals Council of Australia
- Thai Mozambique Logistica
- Maharashtra Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Petron Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Aditya Birla Group - India
- Energy Development Corp, Philippines
- Planning Commission, India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- Attock Cement Pakistan Limited
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Sical Logistics Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- Vizag Seaport Private Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Globalindo Alam Lestari - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Global Coal Blending Company Limited - Australia
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- McConnell Dowell - Australia
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Oldendorff Carriers - Singapore
- Semirara Mining and Power Corporation, Philippines
- The Treasury - Australian Government
- Jaiprakash Power Ventures ltd
- Videocon Industries ltd - India
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- India Bulls Power Limited - India
- Latin American Coal - Colombia
- Renaissance Capital - South Africa
- GAC Shipping (India) Pvt Ltd
- Riau Bara Harum - Indonesia
- Salva Resources Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- White Energy Company Limited
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Intertek Mineral Services - Indonesia
- GMR Energy Limited - India
- Sojitz Corporation - Japan
- Independent Power Producers Association of India
- Essar Steel Hazira Ltd - India
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Savvy Resources Ltd - HongKong
- SN Aboitiz Power Inc, Philippines
- Merrill Lynch Commodities Europe
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- ASAPP Information Group - India
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- CIMB Investment Bank - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Malabar Cements Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Indian Oil Corporation Limited
- Thiess Contractors Indonesia
- Georgia Ports Authority, United States
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Directorate Of Revenue Intelligence - India
- Directorate General of MIneral and Coal - Indonesia
- PNOC Exploration Corporation - Philippines
- Cement Manufacturers Association - India
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Goldman Sachs - Singapore
- Bharathi Cement Corporation - India
- Trasteel International SA, Italy
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Energy Link Ltd, New Zealand
- Electricity Authority, New Zealand
- Ministry of Mines - Canada
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- Barasentosa Lestari - Indonesia
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Manunggal Multi Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Xindia Steels Limited - India
- Australian Coal Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Iligan Light & Power Inc, Philippines
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Alfred C Toepfer International GmbH - Germany
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Agrawal Coal Company - India
- Central Electricity Authority - India
- London Commodity Brokers - England
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- Altura Mining Limited, Indonesia
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