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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, 22 January 14
HANDY/SMAX: TALK OF RATES INDICATES A STEADY TO FIRMING TREND - INTERMODAL
Last week closed off on the red once more for the Dry Bulk market, which continues to see freight rates trying to get steady feet. Nonetheless, with ...
Wednesday, 22 January 14
EXPORT BAN ON UNPROCESSED MINERALS EFFECTIVE 12 JANUARY 2014 - THREE - YEAR REPRIEVE FOR SOME, BUT UNCERTAINTY REMAINS: PWC
COALspot.com: On 11 January 2014, only hours before a long-debated ban on the export of unprocessed minerals was to come into effect, the Government ...
Wednesday, 22 January 14
DRY SECTOR: SENTIMENT REMAINS STRONG - INTERMODAL
As we have now entered 2014 and the Chinese are soon entering their Year of the Horse (sit tight for the ride!), it is a great opportunity to see ho ...
Wednesday, 22 January 14
SGX SUCCESSFULLY LAUNCHED FREIGHT FUTURES
COALspot.com: Singapore exchanged announced that, SGX Freight Futures were successfully launched on 20 January 2014, and the first trade ...
Tuesday, 21 January 14
PORT OF NEWCASTLE SHIPPED SLIGHTLY MORE COAL WEEK ON WEEK
COALspot.com: In the week ended 20 January 14, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 2. ...
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- Marubeni Corporation - India
- Borneo Indobara - Indonesia
- Barasentosa Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- European Bulk Services B.V. - Netherlands
- PNOC Exploration Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- New Zealand Coal & Carbon
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- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Bangladesh Power Developement Board
- Gujarat Sidhee Cement - India
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- Sojitz Corporation - Japan
- Thai Mozambique Logistica
- Coalindo Energy - Indonesia
- Interocean Group of Companies - India
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Gujarat Mineral Development Corp Ltd - India
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Riau Bara Harum - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Xindia Steels Limited - India
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Energy Development Corp, Philippines
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Romanian Commodities Exchange
- Essar Steel Hazira Ltd - India
- Binh Thuan Hamico - Vietnam
- Australian Coal Association
- TNB Fuel Sdn Bhd - Malaysia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- Chamber of Mines of South Africa
- Africa Commodities Group - South Africa
- Kartika Selabumi Mining - Indonesia
- Tamil Nadu electricity Board
- Lanco Infratech Ltd - India
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Billiton Holdings Pty Ltd - Australia
- Rio Tinto Coal - Australia
- Electricity Authority, New Zealand
- Agrawal Coal Company - India
- MS Steel International - UAE
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Attock Cement Pakistan Limited
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Central Java Power - Indonesia
- Metalloyd Limited - United Kingdom
- Mercuria Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Eastern Energy - Thailand
- CIMB Investment Bank - Malaysia
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- IEA Clean Coal Centre - UK
- Deloitte Consulting - India
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Energy Link Ltd, New Zealand
- Krishnapatnam Port Company Ltd. - India
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Price Waterhouse Coopers - Russia
- Cigading International Bulk Terminal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Parliament of New Zealand
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Carbofer General Trading SA - India
- Antam Resourcindo - Indonesia
- PTC India Limited - India
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- White Energy Company Limited
- Jorong Barutama Greston.PT - Indonesia
- Bukit Makmur.PT - Indonesia
- Sree Jayajothi Cements Limited - India
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- Malabar Cements Ltd - India
- Ind-Barath Power Infra Limited - India
- PowerSource Philippines DevCo
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Jaiprakash Power Ventures ltd
- Asmin Koalindo Tuhup - Indonesia
- Medco Energi Mining Internasional
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Economic Council, Georgia
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kepco SPC Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Ministry of Mines - Canada
- Leighton Contractors Pty Ltd - Australia
- Coal and Oil Company - UAE
- Wilmar Investment Holdings
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Australian Commodity Traders Exchange
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- The University of Queensland
- Georgia Ports Authority, United States
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Altura Mining Limited, Indonesia
- Grasim Industreis Ltd - India
- OPG Power Generation Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Savvy Resources Ltd - HongKong
- SMG Consultants - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Kideco Jaya Agung - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Semirara Mining Corp, Philippines
- Central Electricity Authority - India
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