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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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Friday, 20 December 13
US PRODUCED 2.71% MORE COAL WEEK ON WEEK
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.9 million short tons (mmst) of coal in ...
Friday, 20 December 13
DRY BULK MARKET SLUMPS AHEAD OF HOLIDAY SEASON - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
As has been the case in recent years, the dry bulk market has been on a downward trend ahead of the Holiday Season for a large part of the world. Th ...
Thursday, 19 December 13
SHIPPING CONFIDENCE HITS THREE-YEAR HIGH - MOORE STEPHENS
Overall confidence levels in the shipping industry rose to their highest level for more than three years over the three-month period to November 201 ...
Wednesday, 18 December 13
SNP ACTIVITY IN CHINA SEEMS TO BE SLOWING DOWN - CHRISTOS TRAGEAS
Approaching the end of the year, SnP activity in China seems to be slowing down in comparison to the first half of this quarter, as most Chinese Shi ...
Wednesday, 18 December 13
DEMOLITION ACTIVITY SCALED BACK AS FREIGHT RATES RISE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's always been the case that each time we witness a spike in freight rates, demolition activity is decreasing, as owners are looking for more car ...
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- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Kobexindo Tractors - Indoneisa
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Binh Thuan Hamico - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Heidelberg Cement - Germany
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- ICICI Bank Limited - India
- International Coal Ventures Pvt Ltd - India
- Banpu Public Company Limited - Thailand
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Parliament of New Zealand
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Riau Bara Harum - Indonesia
- European Bulk Services B.V. - Netherlands
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- MS Steel International - UAE
- India Bulls Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Petron Corporation, Philippines
- Bhushan Steel Limited - India
- Manunggal Multi Energi - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Maheswari Brothers Coal Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Commonwealth Bank - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Borneo Indobara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Port Waratah Coal Services - Australia
- Bukit Makmur.PT - Indonesia
- Thiess Contractors Indonesia
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Edison Trading Spa - Italy
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Africa Commodities Group - South Africa
- PowerSource Philippines DevCo
- Bhatia International Limited - India
- Independent Power Producers Association of India
- Energy Link Ltd, New Zealand
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Altura Mining Limited, Indonesia
- Coalindo Energy - Indonesia
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Australian Coal Association
- Planning Commission, India
- Antam Resourcindo - Indonesia
- Therma Luzon, Inc, Philippines
- Orica Mining Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Timah Investasi Mineral - Indoneisa
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Directorate General of MIneral and Coal - Indonesia
- Electricity Generating Authority of Thailand
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- Vedanta Resources Plc - India
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- Kideco Jaya Agung - Indonesia
- Parry Sugars Refinery, India
- New Zealand Coal & Carbon
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Eastern Energy - Thailand
- Merrill Lynch Commodities Europe
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Jorong Barutama Greston.PT - Indonesia
- LBH Netherlands Bv - Netherlands
- Carbofer General Trading SA - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Global Business Power Corporation, Philippines
- Aditya Birla Group - India
- Gujarat Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Agrawal Coal Company - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- AsiaOL BioFuels Corp., Philippines
- London Commodity Brokers - England
- Indogreen Group - Indonesia
- IHS Mccloskey Coal Group - USA
- Makarim & Taira - Indonesia
- McConnell Dowell - Australia
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- Australian Commodity Traders Exchange
- Indonesian Coal Mining Association
- Orica Australia Pty. Ltd.
- PetroVietnam Power Coal Import and Supply Company
- Sarangani Energy Corporation, Philippines
- Kumho Petrochemical, South Korea
- Renaissance Capital - South Africa
- Neyveli Lignite Corporation Ltd, - India
- Georgia Ports Authority, United States
- Anglo American - United Kingdom
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Lanco Infratech Ltd - India
- Jaiprakash Power Ventures ltd
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Karbindo Abesyapradhi - Indoneisa
- Metalloyd Limited - United Kingdom
- TeaM Sual Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Gujarat Mineral Development Corp Ltd - India
- Wood Mackenzie - Singapore
- Indian Oil Corporation Limited
- ASAPP Information Group - India
- Coastal Gujarat Power Limited - India
- Aboitiz Power Corporation - Philippines
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- The University of Queensland
- Central Java Power - Indonesia
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- SN Aboitiz Power Inc, Philippines
- VISA Power Limited - India
- Central Electricity Authority - India
- Madhucon Powers Ltd - India
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Ministry of Finance - Indonesia
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- PTC India Limited - India
- GMR Energy Limited - India
- Ministry of Mines - Canada
- Intertek Mineral Services - Indonesia
- Siam City Cement - Thailand
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- PNOC Exploration Corporation - Philippines
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Kapuas Tunggal Persada - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
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