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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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Sunday, 12 January 14
THE FREIGHT MARKET CONTINUE TO REMAIN WEAK NEXT WEEK - SOLYM CARRIERS
Wish You A very Happy New Year
COALspot.com: The market has dropped quite a lot as expected due to holidays and probably also the effect of ban o ...
Friday, 10 January 14
DECISION ON ORE EXPORT BAN WILL BE MADE TOMORROW: INDUSTRY MINISTER, JG SAYS
Industry Minister M.S. Hidayat dismissed reports on Thursday that the government had made a decision on the matter. “We will only make a decis ...
Friday, 10 January 14
US COAL PRODUCTION UP 5.8% ON WEEK IN WEEK ENDED SATURDAY 4 JANUARY
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.8 million short tons (mmst) of coal in ...
Thursday, 09 January 14
THE INDONESIAN GOVERNMENT EASES ORE EXPORT BAN
COALspot.com: The Indonesian government has finally agreed to ease the ore-export ban just a few days before the Sunday deadline amid protests from ...
Thursday, 09 January 14
CAPESIZE: WEST AUSTRALIA FREIGHT IS NOW DOWN IN THE $8S AND STILL DROPPING - FEARNLEYS
Handy
In the Atlantic we see rates sliding slowly for the start of 2014. Several players cvrd over the holidays and the rate decline was som ...
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- Essar Steel Hazira Ltd - India
- Toyota Tsusho Corporation, Japan
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Planning Commission, India
- CNBM International Corporation - China
- ICICI Bank Limited - India
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Kaltim Prima Coal - Indonesia
- Coalindo Energy - Indonesia
- Anglo American - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- GVK Power & Infra Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Maheswari Brothers Coal Limited - India
- Bangladesh Power Developement Board
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- London Commodity Brokers - England
- GMR Energy Limited - India
- Timah Investasi Mineral - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- Gujarat Sidhee Cement - India
- Marubeni Corporation - India
- Romanian Commodities Exchange
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Directorate General of MIneral and Coal - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Eastern Energy - Thailand
- Sindya Power Generating Company Private Ltd
- Kepco SPC Power Corporation, Philippines
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Kapuas Tunggal Persada - Indonesia
- Antam Resourcindo - Indonesia
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Altura Mining Limited, Indonesia
- Goldman Sachs - Singapore
- ASAPP Information Group - India
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Bhoruka Overseas - Indonesia
- Agrawal Coal Company - India
- Standard Chartered Bank - UAE
- GN Power Mariveles Coal Plant, Philippines
- Central Java Power - Indonesia
- MS Steel International - UAE
- Gujarat Electricity Regulatory Commission - India
- Metalloyd Limited - United Kingdom
- Mjunction Services Limited - India
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Sical Logistics Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Iligan Light & Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Directorate Of Revenue Intelligence - India
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Jaiprakash Power Ventures ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Africa Commodities Group - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Baramulti Group, Indonesia
- Intertek Mineral Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Economic Council, Georgia
- Thai Mozambique Logistica
- Bayan Resources Tbk. - Indonesia
- Bharathi Cement Corporation - India
- New Zealand Coal & Carbon
- South Luzon Thermal Energy Corporation
- Globalindo Alam Lestari - Indonesia
- Bukit Baiduri Energy - Indonesia
- Binh Thuan Hamico - Vietnam
- Madhucon Powers Ltd - India
- Attock Cement Pakistan Limited
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Indian Oil Corporation Limited
- Eastern Coal Council - USA
- Petrochimia International Co. Ltd.- Taiwan
- Parliament of New Zealand
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Posco Energy - South Korea
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- PTC India Limited - India
- Malabar Cements Ltd - India
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- White Energy Company Limited
- Cement Manufacturers Association - India
- Electricity Authority, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Manunggal Multi Energi - Indonesia
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Carbofer General Trading SA - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- LBH Netherlands Bv - Netherlands
- Sojitz Corporation - Japan
- Uttam Galva Steels Limited - India
- SN Aboitiz Power Inc, Philippines
- Rio Tinto Coal - Australia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indian Energy Exchange, India
- Georgia Ports Authority, United States
- Independent Power Producers Association of India
- Alfred C Toepfer International GmbH - Germany
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Tata Chemicals Ltd - India
- Australian Coal Association
- Ind-Barath Power Infra Limited - India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Formosa Plastics Group - Taiwan
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Latin American Coal - Colombia
- Asmin Koalindo Tuhup - Indonesia
- Parry Sugars Refinery, India
- Banpu Public Company Limited - Thailand
- The Treasury - Australian Government
- Aboitiz Power Corporation - Philippines
- Sarangani Energy Corporation, Philippines
- Medco Energi Mining Internasional
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- IHS Mccloskey Coal Group - USA
- Cigading International Bulk Terminal - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Oldendorff Carriers - Singapore
- Tamil Nadu electricity Board
- PowerSource Philippines DevCo
- Semirara Mining Corp, Philippines
- Trasteel International SA, Italy
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Karbindo Abesyapradhi - Indoneisa
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- Mercuria Energy - Indonesia
- The University of Queensland
- Ministry of Finance - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- McConnell Dowell - Australia
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- Ministry of Mines - Canada
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Indonesian Coal Mining Association
- India Bulls Power Limited - India
- Semirara Mining and Power Corporation, Philippines
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