We welcome article submissions from experts in the areas of coal, mining,
shipping, etc.
To Submit your article please click here.
|
|
|
Monday, 24 February 14
DRY BULK MARKET TO IMPROVE OVER THE COURSE OF 2014, BUT OVERSUPPLY STILL AN ISSUE SAYS BIMCO'S CHIEF SHIPPING ANALYST
As a gruelling first quarter edges closer to the end, dry bulk ship owners are looking at an improved second quarter demand, which, coupled with slow steaming and other cost saving measures, will lead to the market's rebound. Speaking with Hellenic Shipping News Worldwide in an exclusive interview, BIMCO's Chief Shipping Analyst, Mr. Peter Sand, noted that lower freight rates over the first couple of months of 2014, were to be expected, but as 2014 moves forward, things will begin to improve. "On the average freight rates levels we have already seen 2013 was better than 2012. BIMCO expect 2014 to become better than 2013 in that sense", Sand said. But, oversupply is still an issue, while demolition activity is expected to be lower this year, on the back of improved freight rates.
Since the start of 2014, dry bulk rates have plunged close to the level they were prior to last year's rally. Is this development attributed solely on low seasonal demand, or have there been other factors in play as well?
The development in dry bulk rates are more or less in line with BIMCO expectations as expressed in our recent reports on the shipping market. The combination of the strongest Q4 ever on record and the recurring seasonal low demand in Q1 multiplied by the weakness in demand during Chinese New Year always test the market with a downward correction. Sometimes high volatility results in rates undershooting when a new lower balance is settling in, this time around is not much different but the rebound is not likely to be especially strong in the short run as can also be seen in the freight rates forecasts that BIMCO has released in early-February for the coming two months.
How crucial has been slow steaming to helping sustain freight rates?
Slow steaming is a very vital tool in today’s markets. Without that, the full force of oversupply would weight heavy on the rates, causing miserable returns on investments.
Most recently, the combination of a slower pace of newbuilding tonnage flowing into the market and widely applied slow steaming has lifted earnings.
The way back to an improved utilization of the fleet is paved with patience and “supply management”. The latter includes keeping slow steaming around, continue the scrapping of the less efficient part of the fleet, making retrofits/repairs works now rather than later, an carefully considering the future expansion of the fleet.
In this sense, it is important to remember that slow steaming has a larger impact on the supply side as compared to demolition, but the temporary nature of slow steaming makes it all more volatile as the market conditions improve.
In its recent report, BIMCO reiterated its view that, beginning April and throughout the remainder of the year, the dry bulk market's prospects are rosier, at least demand-wise. Why is this?
A lot of seasonality plays into this forecast. If you e.g. look at exports of iron ore out of Brazil and Australia the pace and volumes increase throughout the year as it progresses – with Q1 being the low quarter. Demand for steam coal and iron ore is expected to rebound during Q2. Moreover, BIMCO do not expect the support from grains to kick in before we enter Q3 and Q4. This is how we expect 2014 will play out on the big scale.
Do you expect the recovery scenario to fully materialize over the course of the year, in terms of freight rate levels and how sustainable will this rebound be?
We see a winding and potentially long road back to a fully sustainable market where the fleet is once again steaming at “new normal” service speed also on the ballast legs to some extent. Our “new normal” service speed is one that is lower than the norm of the past decade – due to higher bunker costs, increased fuel efficiency and the fact that slow steaming is applied whenever possible. But the way back also holds many “windows of opportunity” where rates will firm and spike as demand picks up strongly or weather-related factors lend a hand.
On the average freight rates levels we have already seen 2013 was better than 2012. BIMCO expect 2014 to become better than 2013 in that sense. But as we are only just about to see the demand side outstripping the supply side, following multiple years of the opposite, the fundamental market balance is also likely only to improve slowly and bring around higher levels of fleet utilization. Going forward BIMCO expect higher volatility as the market get tighter.
Is the supply overhang alleviated at the moment, compared to a year ago?
We have to consider slow steaming an integral part of our industry to handle the oversupply and improve industry economics. The overhang has come down over the past half year, but we still estimate oversupply of 20-25%.
Are you worried about the level of newbuilding ordering over the past year, a dynamic which has spilled over into 2014, even more aggressively?
As regards to the placing of new orders, I am confident that the individual industry players knows exactly what they are doing. Nevertheless, if you look at it from a pure industry point of view you could argue that if there is an overhang of capacity you should scrap more vessels than enters into the active fleet in order to bring back a balance – but that’s not how it works.
In terms of demolition activity we've seen a drop over the past few months, as owners found it more financially wise to retain or resell their older vessels. Will this trend change, or will we see a substantial drop over the course of 2014, thus offsetting the rise in demand?
There is no real big surprise in the recent development and we rely on the trend to go on. BIMCO expect 14m DWT to be scrapped in 2014, this a drop of 33% as compared to 2013. When rates go up – fewer chose to cut capacity. The increased in secondhand prices too, spells it out – a resale is much more likely than a sale to cash buyer. It also tells us that more buyers than sellers are in the market now. This is pushing prices up. Different types of ships, in size, gear, draft and operational capabilities simple cater for different demand. This is why ships are not sold for demolition due to the age criteria only.
Taking into account the aforementioned development in terms of tonnage supply, do you think that the projected recovery this year could be shortlived, or is there "enough gas in the tank", to see the market up the hills of 2015 and 2016 newbuilding deliveries?
Our supply forecast for 2014 and 2015 certainly looks manageable. Any additional new orders can still absorbed by yards for 2016-2017 delivery without jeopardizing the recovery. BIMCO do not see the improving trend derailed by anything that we can see in the market today. Only unforeseen major game changers can do that. Even though China is slowing down and transforming its economy toward a higher dependency on services (rather than manufacturing) and private consumption, we trust a soft landing will continue to support the dry bulk market.
Will the market ever shake the effect of China in cargo demand, at least offset it, through the rise of other countries in dry bulk trade? If so, which countries could those be?
China is the elephant in the dry bulk room. The wise buyer of commodities at the right prices and heavy weight player providing the market with massive amounts of demand. China means the world to dry bulk shipping and the nation holds the key to a strong market going forward. We have not seen a single nation being so dominant in the global market before and I doubt we will see something like this duplicated in the near term perhaps never. It is natural to mention India in this context, as the nation holds a giant potential as an importer but also as an exporter of dry bulk commodities. However, it would be premature to compare the two nations today to forecast the development of India, as they are fundamentally very different.
Source: Nikos Roussanoglou, Hellenic Shipping News
If you believe an article violates your rights or the rights of others, please contact us.
|
|
Monday, 03 February 14
API 8 CFR SOUTH CHINA COAL SWAP CONTRACTS FALL
COALspot.com: API 8 CFR South China Coal swaps for average Q1 14 delivery lost 4.71 percent month on month and closed at US$ 78.87 per mt as on Frid ...
Monday, 03 February 14
COAL FREIGHT RATES REMAIN UNDER PRESSURE
COALspot.com: The BDI is fell 50 pct over last one month which seems to be one of the lowest fall in last few years.
The BDI was down by 11 ...
Friday, 31 January 14
U.S. COAL PRODUCTION TOTALED APPROXIMATELY 19.2 MMST W-O-W
COALspot.com – United States the world’s second largest coal producer, produced approximately 19.2 million short tons (mmst) of coal in ...
Friday, 31 January 14
DRY BULK MARKET STILL ON A FALL, EXPECTED TO WORSEN - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
The dry bulk market is definitely in the doldrums since the start of the year, in what could only be described as a "lost" month for indus ...
Thursday, 30 January 14
JPU SETTLEMENT PRICE AS A BENCHMARK WILL DECLINE IN IMPORTANCE BUT REMAIN RELEVANT, SAYS WOOD MACKENZIE
JPU price will remain above spot, trending closer to spot till 2015 then increasing to 2035.
Japanese Power Utilities (JPU) are approaching a cru ...
|
|
|
Showing 3871 to 3875 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Bangladesh Power Developement Board
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- IHS Mccloskey Coal Group - USA
- Planning Commission, India
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Gujarat Electricity Regulatory Commission - India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Bhatia International Limited - India
- ICICI Bank Limited - India
- Bukit Baiduri Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Kobexindo Tractors - Indoneisa
- Mjunction Services Limited - India
- The Treasury - Australian Government
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
- Star Paper Mills Limited - India
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Iligan Light & Power Inc, Philippines
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- South Luzon Thermal Energy Corporation
- TeaM Sual Corporation - Philippines
- Mercuria Energy - Indonesia
- Oldendorff Carriers - Singapore
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Wilmar Investment Holdings
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Marubeni Corporation - India
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- Interocean Group of Companies - India
- Riau Bara Harum - Indonesia
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Siam City Cement PLC, Thailand
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Sarangani Energy Corporation, Philippines
- Madhucon Powers Ltd - India
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- Savvy Resources Ltd - HongKong
- Indian Oil Corporation Limited
- Sojitz Corporation - Japan
- Goldman Sachs - Singapore
- Orica Mining Services - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Mines - Canada
- White Energy Company Limited
- Sree Jayajothi Cements Limited - India
- Cigading International Bulk Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Directorate Of Revenue Intelligence - India
- Eastern Energy - Thailand
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Kideco Jaya Agung - Indonesia
- Standard Chartered Bank - UAE
- Jaiprakash Power Ventures ltd
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Neyveli Lignite Corporation Ltd, - India
- Samtan Co., Ltd - South Korea
- Price Waterhouse Coopers - Russia
- Ambuja Cements Ltd - India
- Tata Chemicals Ltd - India
- Energy Link Ltd, New Zealand
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Australian Coal Association
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Kapuas Tunggal Persada - Indonesia
- Indika Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- Meralco Power Generation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Coalindo Energy - Indonesia
- PTC India Limited - India
- New Zealand Coal & Carbon
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Global Green Power PLC Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Billiton Holdings Pty Ltd - Australia
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Leighton Contractors Pty Ltd - Australia
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Semirara Mining Corp, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- OPG Power Generation Pvt Ltd - India
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Metalloyd Limited - United Kingdom
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Minerals Council of Australia
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Indo Tambangraya Megah - Indonesia
- Electricity Authority, New Zealand
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Gujarat Mineral Development Corp Ltd - India
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- McConnell Dowell - Australia
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Ministry of Transport, Egypt
- Makarim & Taira - Indonesia
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Rio Tinto Coal - Australia
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- Singapore Mercantile Exchange
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Latin American Coal - Colombia
- Karbindo Abesyapradhi - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Salva Resources Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Eastern Coal Council - USA
- Siam City Cement - Thailand
- International Coal Ventures Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Larsen & Toubro Limited - India
- Australian Commodity Traders Exchange
- Global Coal Blending Company Limited - Australia
- Independent Power Producers Association of India
- Bhushan Steel Limited - India
- Indogreen Group - Indonesia
- VISA Power Limited - India
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
|
| |
| |
|
