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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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Tuesday, 07 January 14
INDONESIA RAISES COAL PRICE THIS MONTH
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia has increased government declared coal bench mark price by US$ 1.59 / MT ...
Tuesday, 07 January 14
NEWCASTLE COAL TERMINAL'S COAL EXPORTS SLIDE TO 3.54 MMT W/E 30 DECEMBER 13
COALspot.com: In the week ended December 30, power plant and semi-soft coking coal shipments from the port of Newcastle in Queensland, totalled 3.54 ...
Tuesday, 07 January 14
US COAL OUTPUT SLIDES 9 PCT WEEK ON WEEK, EIA SAYS
COALspot.com – United States the world’s second largest coal producer, produced approximately 17.8 million short tons (mmst) of coal in ...
Monday, 06 January 14
ARGUS LAUNCHES SPOT CFR EAST COAST INDIA COAL ASSESSMENTS
COALspot.com: Global energy and commodity news and price reporting agency Argus has announced today that, the company has launched CFR coal assessme ...
Monday, 06 January 14
INDONESIAN COAL SWAPS SLIDE TO $ 61.25 FOR Q4' 14 DELIVERY
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.32 pmt month on month on Friday 3 January 2014. Th ...
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- Karbindo Abesyapradhi - Indoneisa
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- Billiton Holdings Pty Ltd - Australia
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- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Aboitiz Power Corporation - Philippines
- Vizag Seaport Private Limited - India
- Antam Resourcindo - Indonesia
- CIMB Investment Bank - Malaysia
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Wilmar Investment Holdings
- PowerSource Philippines DevCo
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- ICICI Bank Limited - India
- Sojitz Corporation - Japan
- IHS Mccloskey Coal Group - USA
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Ceylon Electricity Board - Sri Lanka
- Uttam Galva Steels Limited - India
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- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Thai Mozambique Logistica
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Meralco Power Generation, Philippines
- Aditya Birla Group - India
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- Australian Coal Association
- Attock Cement Pakistan Limited
- GN Power Mariveles Coal Plant, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Bayan Resources Tbk. - Indonesia
- Manunggal Multi Energi - Indonesia
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- Grasim Industreis Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Samtan Co., Ltd - South Korea
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Siam City Cement PLC, Thailand
- Sree Jayajothi Cements Limited - India
- Agrawal Coal Company - India
- The University of Queensland
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- TNB Fuel Sdn Bhd - Malaysia
- Jaiprakash Power Ventures ltd
- Vijayanagar Sugar Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- GAC Shipping (India) Pvt Ltd
- Simpson Spence & Young - Indonesia
- India Bulls Power Limited - India
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Medco Energi Mining Internasional
- Alfred C Toepfer International GmbH - Germany
- Mercuria Energy - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- International Coal Ventures Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Ambuja Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ind-Barath Power Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Electricity Generating Authority of Thailand
- ASAPP Information Group - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Kalimantan Lumbung Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Petron Corporation, Philippines
- Vedanta Resources Plc - India
- European Bulk Services B.V. - Netherlands
- Independent Power Producers Association of India
- Bhoruka Overseas - Indonesia
- Latin American Coal - Colombia
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kapuas Tunggal Persada - Indonesia
- Kideco Jaya Agung - Indonesia
- Videocon Industries ltd - India
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- Leighton Contractors Pty Ltd - Australia
- Indonesian Coal Mining Association
- White Energy Company Limited
- Central Java Power - Indonesia
- Chettinad Cement Corporation Ltd - India
- PNOC Exploration Corporation - Philippines
- Metalloyd Limited - United Kingdom
- SMG Consultants - Indonesia
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sakthi Sugars Limited - India
- Indian Energy Exchange, India
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Rio Tinto Coal - Australia
- Wood Mackenzie - Singapore
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Borneo Indobara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Bukit Baiduri Energy - Indonesia
- Coalindo Energy - Indonesia
- Larsen & Toubro Limited - India
- Deloitte Consulting - India
- LBH Netherlands Bv - Netherlands
- Global Green Power PLC Corporation, Philippines
- GVK Power & Infra Limited - India
- Bhatia International Limited - India
- Makarim & Taira - Indonesia
- Bharathi Cement Corporation - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The Treasury - Australian Government
- MS Steel International - UAE
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Gujarat Mineral Development Corp Ltd - India
- Binh Thuan Hamico - Vietnam
- Mjunction Services Limited - India
- Sical Logistics Limited - India
- Salva Resources Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Goldman Sachs - Singapore
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Kohat Cement Company Ltd. - Pakistan
- Economic Council, Georgia
- Electricity Authority, New Zealand
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- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Heidelberg Cement - Germany
- Madhucon Powers Ltd - India
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