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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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Wednesday, 12 March 14
DRY BULK VESSELS STILL THE CREAM OF THE CROP FOR SHIP OWNERS
Dry bulk carriers have remained the most popular vessel type among ship owners as proven by the sheer number of second hand vessel sales and new ...
Tuesday, 11 March 14
HOLD HARMLESS CLAUSES ARE NOT ALWAYS MUTUAL! - ITIC
KNOWLEDGE TO ELEVATE
ITIC provides an insurance related contract review service to all of its members. As the leading professional indemnity i ...
Tuesday, 11 March 14
NEWCASTLE SHIPPED 6.98% LESS COAL WEEK ON WEEK
COALspot.com: In the week ended 10 March 2014, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, total 2 ...
Tuesday, 11 March 14
INDONESIAN SUB-BITUMINOUS COAL SWAPS CONTINUES TO FALL
COALspot.com – Indonesia, the world’s largest exporter of the thermal coal's swaps for delivery April - June 2014 slip again thi ...
Monday, 10 March 14
API 8 CFR SOUTH CHINA COAL SWAPS LOST 4.28 PERCENT MONTH ON MONTH FOR Q2 DELIVERY
COALspot.com: API 8 CFR South China Coal swaps for average Q2 14 deliveries lost 4.28 percent month on month and closed at US$ 73.97 per mt as on Fr ...
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- Thiess Contractors Indonesia
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Indian Oil Corporation Limited
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- Planning Commission, India
- Malabar Cements Ltd - India
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- PNOC Exploration Corporation - Philippines
- Central Electricity Authority - India
- The University of Queensland
- ICICI Bank Limited - India
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- Petron Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Mercator Lines Limited - India
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- Indian Energy Exchange, India
- Latin American Coal - Colombia
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- Sindya Power Generating Company Private Ltd
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Global Business Power Corporation, Philippines
- Bayan Resources Tbk. - Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement PLC, Thailand
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- Savvy Resources Ltd - HongKong
- Leighton Contractors Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
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- South Luzon Thermal Energy Corporation
- Electricity Authority, New Zealand
- London Commodity Brokers - England
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- Minerals Council of Australia
- Ambuja Cements Ltd - India
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- Chamber of Mines of South Africa
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
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- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Bhoruka Overseas - Indonesia
- Vedanta Resources Plc - India
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Meenaskhi Energy Private Limited - India
- IHS Mccloskey Coal Group - USA
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Wood Mackenzie - Singapore
- Australian Coal Association
- GAC Shipping (India) Pvt Ltd
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Tata Chemicals Ltd - India
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Xindia Steels Limited - India
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
- Meralco Power Generation, Philippines
- Georgia Ports Authority, United States
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Directorate Of Revenue Intelligence - India
- Alfred C Toepfer International GmbH - Germany
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Port Waratah Coal Services - Australia
- Metalloyd Limited - United Kingdom
- Bangladesh Power Developement Board
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Attock Cement Pakistan Limited
- Edison Trading Spa - Italy
- Billiton Holdings Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- PowerSource Philippines DevCo
- Binh Thuan Hamico - Vietnam
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Sojitz Corporation - Japan
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Jaiprakash Power Ventures ltd
- GVK Power & Infra Limited - India
- Global Green Power PLC Corporation, Philippines
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Coastal Gujarat Power Limited - India
- San Jose City I Power Corp, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Kohat Cement Company Ltd. - Pakistan
- Jorong Barutama Greston.PT - Indonesia
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- Gujarat Sidhee Cement - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kalimantan Lumbung Energi - Indonesia
- Singapore Mercantile Exchange
- Karaikal Port Pvt Ltd - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Eastern Energy - Thailand
- Chettinad Cement Corporation Ltd - India
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Simpson Spence & Young - Indonesia
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Indogreen Group - Indonesia
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Manunggal Multi Energi - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- White Energy Company Limited
- Bhushan Steel Limited - India
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Siam City Cement - Thailand
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- New Zealand Coal & Carbon
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Economic Council, Georgia
- Salva Resources Pvt Ltd - India
- VISA Power Limited - India
- Toyota Tsusho Corporation, Japan
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Anglo American - United Kingdom
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Indika Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Cement Manufacturers Association - India
- Sakthi Sugars Limited - India
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Maheswari Brothers Coal Limited - India
- Bulk Trading Sa - Switzerland
- Krishnapatnam Port Company Ltd. - India
- CNBM International Corporation - China
- Samtan Co., Ltd - South Korea
- Directorate General of MIneral and Coal - Indonesia
- Baramulti Group, Indonesia
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