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, 20 January 14
SUB-BIT INDONESIA COAL SWAP SEEN LOWER IN 2ND HALF OF 2014
COALspot.com – Sub-Bit Indonesia coal swap (FOB) for average Q1’ 14 delivery lost $ 0.78 pmt month on month on Friday 17 January 2014. T ...
Monday, 20 January 14
THE CFR SOUTH CHINA COAL MARKET APPEARS TO HAVE LOST DIRECTION
COALspot.com : API 8 CFR South China Coal swaps for average Q1’ 14 delivery lost 4.25 percept month on month and closed at US$ 79.48 per mt as ...
Sunday, 19 January 14
FREIGHT MARKETS SEE CONTINUED WEAK PERFORMANCE
COALspot.com: The market has continued to soften particularly in the far East/SE Asia sector.
The BDI was down 6 pct week on week, the index was ...
Friday, 17 January 14
US COAL PRODUCTION DOWN WEEK ON WEEK: EIA
COALspot.com – United States the world’s second largest coal producer, produced approximately 18.3 million short tons (mmst) of co ...
Friday, 17 January 14
DRY BULK MARKET ENDS DECLINE, BOUNCES BACK - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING NEWS
It's been a rough start to the New Year for the dry bulk market, which was supposed to be on the verge of rallying to new heights this year, on the ...
|
|
|
Showing 3896 to 3900 news of total 6871 |
|
 |
|
|
|
|
| |
|
 |
|
|
| |
|
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Bharathi Cement Corporation - India
- Parliament of New Zealand
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Therma Luzon, Inc, Philippines
- Coal and Oil Company - UAE
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Miang Besar Coal Terminal - Indonesia
- Toyota Tsusho Corporation, Japan
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Kumho Petrochemical, South Korea
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- CIMB Investment Bank - Malaysia
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Minerals Council of Australia
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Latin American Coal - Colombia
- Jaiprakash Power Ventures ltd
- Ambuja Cements Ltd - India
- Goldman Sachs - Singapore
- Timah Investasi Mineral - Indoneisa
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Lanco Infratech Ltd - India
- Renaissance Capital - South Africa
- Manunggal Multi Energi - Indonesia
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Pendopo Energi Batubara - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Authority, New Zealand
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Medco Energi Mining Internasional
- Vizag Seaport Private Limited - India
- Agrawal Coal Company - India
- Xindia Steels Limited - India
- Eastern Energy - Thailand
- Kartika Selabumi Mining - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- International Coal Ventures Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Jindal Steel & Power Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Heidelberg Cement - Germany
- LBH Netherlands Bv - Netherlands
- Altura Mining Limited, Indonesia
- VISA Power Limited - India
- Chamber of Mines of South Africa
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Salva Resources Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Globalindo Alam Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Ministry of Transport, Egypt
- San Jose City I Power Corp, Philippines
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Meenaskhi Energy Private Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Mercator Lines Limited - India
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Africa Commodities Group - South Africa
- Power Finance Corporation Ltd., India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Central Electricity Authority - India
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Metalloyd Limited - United Kingdom
- CNBM International Corporation - China
- Alfred C Toepfer International GmbH - Germany
- Kalimantan Lumbung Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Krishnapatnam Port Company Ltd. - India
- Chettinad Cement Corporation Ltd - India
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- PNOC Exploration Corporation - Philippines
- McConnell Dowell - Australia
- Global Coal Blending Company Limited - Australia
- Interocean Group of Companies - India
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Sarangani Energy Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- The University of Queensland
- Straits Asia Resources Limited - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Tamil Nadu electricity Board
- Sindya Power Generating Company Private Ltd
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- New Zealand Coal & Carbon
- Maharashtra Electricity Regulatory Commission - India
- Coalindo Energy - Indonesia
- Bangladesh Power Developement Board
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Gujarat Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Semirara Mining and Power Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Trasteel International SA, Italy
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- White Energy Company Limited
- Deloitte Consulting - India
- Posco Energy - South Korea
- Standard Chartered Bank - UAE
- SMG Consultants - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Videocon Industries ltd - India
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- Samtan Co., Ltd - South Korea
- Economic Council, Georgia
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
|
| |
| |
|
