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Monday, 05 January 15
THE SHIPPING MARKET IN 2014 AND LOOKING FORWARD - BIMCO
 2014 started with plenty of optimism for a considerably better global economy and an improved shipping market. Things turned out somewhat differently. Adverse weather conditions in the US during winter were the dominant factor, creating a difficult first half of the year for the global economy. The developing and emerging markets continued on a downward trend, while a sunnier outlook from the US and Europe had the effect of moving the already more advanced economies forward.
The quantitative easing programme of the US Central Bank has now ended. This is a landmark in terms of recovery. Following a quadrupling of the US monetary base, unemployment has come down, the stock market has gone up and economic growth has become more robust. The UK has followed the same path as the US, with similar results. This is outstanding in the otherwise sluggish European economic development.
In Japan, “Abenomics” is facing headwinds caused by a hike in sales taxes and a subsequent return to recession. Japan’s economy has been stagnating for decades, and it is unlikely to move much further forward from this in 2015.
The slowing of the Chinese economy is adding uncertainty to the level of shipping demand generated in the Far East. Its soft landing seems to incur turbulence, with some indicators suggesting the official GDP data may not give us the full story.
Growth in emerging markets and developing economies is set for a comeback in 2015, with GDP-growth improving from 4.4% in 2014 to 5.0% in 2015. The advanced economies are likely to stay on the recovery track, and improve their GDP-growth to 2.3% in 2015 (1.8% in 2014). The common challenges remain poor inflation expectations, a lack of structural reforms and lack of job creation. There is clearly room for more political initiatives in 2015 to support the global economy.
Supply: A stalling orderbook means reality has hit home
The total orderbook remained unchanged during 2014. This signals that the industry is now realising that more new orders may not be the right thing to do after all.
The fundamental oversupply of capacity in all of the major shipping segments has not changed much over the past year. A higher level of demand has only just matched the net supply of new tonnage coming on stream.
Crude oil tankers are the only exception to the general status quo in the balance of freight markets. A multi-year low inflow of new crude oil tankers has stimulated earnings growth of some 20% compared to 2013. Meanwhile, the growing supply pressure in product tankers neutralised most of the growing demand side, with earnings coming in just a little shy of 2013.
Container ships keep getting bigger, breaking previous size records for both individual ships and the average size across the fleet. The CSCL Globe, with a capacity of 19,000 TEU, was launched in November, and the average TEU capacity of a 2014-newbuild increased to 7,400 TEU, up from 6,600 TEU in 2013. Next year the scheduled average is 8,000 TEU.
Looking forward to 2015, BIMCO expects the dry bulk fleet to have found a new “normal” level of supply side growth, expanding by 5.1% (5.5% in 2014). Regrettably, the level is still too high to reduce the glut of ships in the market. For tankers, BIMCO expects the dirty segment to grow by 1.7% (1.3% in 2014). Three years of low supply growth has led to more positive short-term prospects for crude oil tankers. In the clean segment, the estimated supply growth for 2015 is 4.6% (4.3% in 2014). Supply growth in the container ship segment is expected to drop to 5.8% in 2015 (6.2% in 2014).
Dry Bulk: New challenges await as demand slows down
BIMCO expects dry bulk demand to slow in 2015 to a rate of 4-5%. Iron ore demand will again be the centre of attention. In recent years, demand growth has been biased heavily towards the Capesize segment. In 2014, 70% of the total volume growth came from increased iron ore demand driven by China. BIMCO expects this trend to continue, with Capesizes outperforming the smaller sizes relatively.
The strong iron ore demand in 2014 was somewhat neutralised by weaker coal demand from China. Meanwhile, the Indonesian ban on exports of unprocessed bauxite and nickel ore resulted in a weak Supramax market in the Far East.
Towards the end of the year, the late arrival of strong exports of iron ore out of Brazil proved to be insufficient to deliver on the promise of 2013, when rates for all segments went up. While earnings had hit the floor in 2012, BIMCO expected 2014 to build on the optimism of 2013 and continue on the road to recovery. That did not materialise.
Tanker: what is the “new normal” demand level?
The crude oil tanker market started 2014 on a very positive note, with a five-year-high for earnings in the first quarter. The market’s strength showed clearly in early autumn and in the current winter market. The export of crude oil from West Africa has shifted from West to East as the US has reduced its imports to almost zero. This has given the demand side momentum, as West Africa now export more to the Far East, creating many more ton-miles.
For product tankers, the final quarter of 2014 contrasts greatly with the dull and flat market we have seen for most of the year. Despite US oil product export growth slowing down, it remains a positive story overall. Demand growth just managed to match supply growth, as the positive events arrived late in the year for the shipping market as well as in global economics.
Falling oil prices stirred some positive unrest in the tanker market, with rising tonnage demand in their wake. In spite of the price drop arising from weak oil demand and oversupply in the market, the current low and volatile commodity price is good for trading and shipping.
With a dramatic fall in bunker prices, it is vital for a continued industry recovery that all shipping segments resist higher speeds. Failure to do so may compromise improvement of the fundamental balance, which is essential to bring prosperity back.
Container: Will strong demand and slow steaming remain?
Strong demand growth on the large-volume trades from Far East to US and Europe has brought lower volatility in freight rates on key trades while re-activating most of the previously idle ships.
However, during peak season, the steep drop in freight rates on the Far East to Europe trade lane made it clear that the utmost care is constantly required for the supply side, while the introduction of ever-larger ships continues.
Improved industry earnings currently rest on one central requirement: slow steaming and defence of individual market share. This highly competitive market only returns a positive margin if the cost base is extremely low.
BIMCO expects containership supply to continue to grow at its “new normal” level of around 6%, making the demand side a focal point. European demand has been stronger than private consumption figures indicated, and we may well see further improvement for US demand. The US East Coast could build further on a remarkable year as the ports prepare for the imminent arrival of ultra-large container ships. Enlargement projects in the Panama Canal and Suez Canal will further influence the deployment of ships.
Source: BIMCO | Hellenic Shipping
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Monday, 05 January 15
CFR SOUTH CHINA COAL SWAPS GAINED WEEK OVER WEEK, SGX DATA SHOWS
COALspot.com: API 8 CFR South China Coal swap for Q1’ 2015 delivery has decreased by US$ 2.50 (-4.02%) month over month and gained US$ 0.20 ( ...
Monday, 05 January 15
FIVE ENERGY SURPRISES FOR 2015: THE POSSIBLE AND THE IMPROBABLE - KURT COBB
The coming year is likely to be as full of surprises in the field of energy as 2014 was. We just don't know which surprises! I am not predictin ...
Monday, 05 January 15
API 5 FOB NEWCASTLE COAL SWAP FOR Q1'15 DELIVERY CLOSED US$ 0.45 HIGHER COMPARED TO Q2'15 CLOSING
COALspot.com: API 5 FOB Newcastle Coal swap for Q1’ 2015 delivery lost US$ 0.60 per MT (-1.15%) month over month and gained US$ 0.02 (+0.04%) ...
Sunday, 04 January 15
BALTIC DRY INDEX CONTINUES ITS DECLINE IN 2015
Wish you all a very Happy New Year 2015. The last report was dated 19th Dec 2014 and due to Christmas and new year holidays no reports were publish ...
Saturday, 03 January 15
U.S WEEKLY COAL PRODUCTION FELL 11.2% TO 17.6 MMST WEEK OVER WEEK - EIA
COALspot.com – United States the world's one of the largest coal producers, produced approximately 17.6 million short tons (mmst) of coal ...
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- London Commodity Brokers - England
- Merrill Lynch Commodities Europe
- Sarangani Energy Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Agrawal Coal Company - India
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Global Coal Blending Company Limited - Australia
- Indonesian Coal Mining Association
- Madhucon Powers Ltd - India
- GVK Power & Infra Limited - India
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- PowerSource Philippines DevCo
- Ministry of Mines - Canada
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Intertek Mineral Services - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Renaissance Capital - South Africa
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- TeaM Sual Corporation - Philippines
- Parry Sugars Refinery, India
- Tata Chemicals Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Mintek Dendrill Indonesia
- Coalindo Energy - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Coastal Gujarat Power Limited - India
- AsiaOL BioFuels Corp., Philippines
- Mjunction Services Limited - India
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- IHS Mccloskey Coal Group - USA
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- Electricity Authority, New Zealand
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- White Energy Company Limited
- ASAPP Information Group - India
- Wood Mackenzie - Singapore
- Heidelberg Cement - Germany
- Independent Power Producers Association of India
- Maheswari Brothers Coal Limited - India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- VISA Power Limited - India
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Sakthi Sugars Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- PetroVietnam Power Coal Import and Supply Company
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Iligan Light & Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Bulk Trading Sa - Switzerland
- Semirara Mining Corp, Philippines
- McConnell Dowell - Australia
- Jindal Steel & Power Ltd - India
- Sical Logistics Limited - India
- Kideco Jaya Agung - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- CNBM International Corporation - China
- Power Finance Corporation Ltd., India
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Lanco Infratech Ltd - India
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- New Zealand Coal & Carbon
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Toyota Tsusho Corporation, Japan
- Kobexindo Tractors - Indoneisa
- Indogreen Group - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Parliament of New Zealand
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Marubeni Corporation - India
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Eastern Coal Council - USA
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Formosa Plastics Group - Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Minerals Council of Australia
- Indian Oil Corporation Limited
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Carbofer General Trading SA - India
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coal and Oil Company - UAE
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Metalloyd Limited - United Kingdom
- Australian Coal Association
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Ceylon Electricity Board - Sri Lanka
- Energy Development Corp, Philippines
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Bhatia International Limited - India
- Electricity Generating Authority of Thailand
- Interocean Group of Companies - India
- Ministry of Finance - Indonesia
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Miang Besar Coal Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Vedanta Resources Plc - India
- Riau Bara Harum - Indonesia
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- IEA Clean Coal Centre - UK
- Price Waterhouse Coopers - Russia
- Anglo American - United Kingdom
- Latin American Coal - Colombia
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Cement Manufacturers Association - India
- Uttam Galva Steels Limited - India
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Global Green Power PLC Corporation, Philippines
- Timah Investasi Mineral - Indoneisa
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
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