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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, 10 March 14
THE FREIGHT MARKET WAS QUITE FIRM THIS PAST WEEK
COALspot.com: The freight market was quite firm this past week with BDI sharply increased by 22.65 pct week on week and closed at 1543 points, while ...
Saturday, 08 March 14
LETTERS OF INDEMNITY - SKULD
KNOWLEDGE TO ELEVATE
In today's trading market, owners are frequently requested to accept a letter of indemnity (LOI) in exchange for complying ...
Friday, 07 March 14
DRY BULK MARKET TO BENEFIT FROM CHINA'S GDP GROWTH TARGET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
With the dry bulk market freight rates finally making waves, China's aim of 7.5% GDP growth for 2014 mean once again positive news for the shipping ...
Friday, 07 March 14
RBCT, WORLD'S LARGEST COAL EXPORTING TERMINAL SHIPPED 1.78% LESS COAL MONTH ON MONTH
COALspot.com: South Africa's Richards Bay Coal Terminal (RBCT) the single largest export coal terminal in the world, shipped 4.487 million tons of ...
Friday, 07 March 14
INDONESIA SHIPPED 7% LESS COAL IN JANUARY 2014 COMPARED TO ITS DECEMBER EXPORTS
COALspot.com: Indonesia, the world 4th largest coal producer and the Global largest multi grade coal exporter shipped around $1.8* billion ...
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- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Karbindo Abesyapradhi - Indoneisa
- TNB Fuel Sdn Bhd - Malaysia
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Bharathi Cement Corporation - India
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Thiess Contractors Indonesia
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Commonwealth Bank - Australia
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Indian Energy Exchange, India
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Interocean Group of Companies - India
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Coastal Gujarat Power Limited - India
- Star Paper Mills Limited - India
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Independent Power Producers Association of India
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- Posco Energy - South Korea
- Orica Australia Pty. Ltd.
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Bhoruka Overseas - Indonesia
- Marubeni Corporation - India
- Tamil Nadu electricity Board
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Aditya Birla Group - India
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Antam Resourcindo - Indonesia
- Kideco Jaya Agung - Indonesia
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Maheswari Brothers Coal Limited - India
- Kapuas Tunggal Persada - Indonesia
- Kaltim Prima Coal - Indonesia
- Standard Chartered Bank - UAE
- Ind-Barath Power Infra Limited - India
- Romanian Commodities Exchange
- Mjunction Services Limited - India
- Vizag Seaport Private Limited - India
- Therma Luzon, Inc, Philippines
- Price Waterhouse Coopers - Russia
- Medco Energi Mining Internasional
- Chamber of Mines of South Africa
- Australian Coal Association
- Parry Sugars Refinery, India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Trasteel International SA, Italy
- GAC Shipping (India) Pvt Ltd
- Videocon Industries ltd - India
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Port Waratah Coal Services - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- Ministry of Mines - Canada
- Sakthi Sugars Limited - India
- TeaM Sual Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Agrawal Coal Company - India
- Sree Jayajothi Cements Limited - India
- Mercuria Energy - Indonesia
- Savvy Resources Ltd - HongKong
- GMR Energy Limited - India
- Orica Mining Services - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Salva Resources Pvt Ltd - India
- The Treasury - Australian Government
- Parliament of New Zealand
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- New Zealand Coal & Carbon
- The University of Queensland
- Kepco SPC Power Corporation, Philippines
- White Energy Company Limited
- Leighton Contractors Pty Ltd - Australia
- Globalindo Alam Lestari - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Altura Mining Limited, Indonesia
- Karaikal Port Pvt Ltd - India
- Coalindo Energy - Indonesia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Ambuja Cements Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Merrill Lynch Commodities Europe
- Sical Logistics Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Binh Thuan Hamico - Vietnam
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- ASAPP Information Group - India
- Rashtriya Ispat Nigam Limited - India
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Oldendorff Carriers - Singapore
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
- London Commodity Brokers - England
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Metalloyd Limited - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- ICICI Bank Limited - India
- Jindal Steel & Power Ltd - India
- Manunggal Multi Energi - Indonesia
- Gujarat Sidhee Cement - India
- IEA Clean Coal Centre - UK
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Miang Besar Coal Terminal - Indonesia
- Cement Manufacturers Association - India
- Banpu Public Company Limited - Thailand
- South Luzon Thermal Energy Corporation
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- CIMB Investment Bank - Malaysia
- Larsen & Toubro Limited - India
- Power Finance Corporation Ltd., India
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wood Mackenzie - Singapore
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Indika Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Gujarat Mineral Development Corp Ltd - India
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
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