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Wednesday, 04 March 15
KEEP CALM AND INVEST IN DRY - THEODORE NTALAKOS
 Keep Calm and Carry On was originally a motivational poster, intended to raise the morale of the British public, produced by the British government in 1939 in preparation for the Second World War. In today's shipping environment where the daily headlines are in the likes of “excess vessel supply continues to weigh on the dry bulk market” and “slower growth in steel output and reduced coal demand contribute to a declining freight rate environment”, we also need all the motivation we can get. Companies’ revenues have declined and many operators are in the red, some are chopping charter rates, we hear about bankruptcies, restructurings and anyone can easily paint a very bleak outlook for the next couple of years.
According to the IMF, global growth in 2014 was 3.3% and in 2015 - 2016 it is projected to be 3.5 and 3.7 percent respectively. It is notable that the 2015-16 projections were revised downwards by 0.3% in October 2014, reflecting the reassessment of prospects in China, Russia, the euro area, and Japan, as well as weaker activity in some major oil exporters because of the sharp drop in oil prices. The United States is the only major economy for which growth projections have been raised.
In January 2014 the dry bulk fleet (over 20,000tons dwt) stood at 8,979 vessels or 697,63million tons deadweight. During 2014 the net growth (deliveries/additions minus demolitions/removals) was 5% in terms of deadweight (a closer proxy to the carrying capacity). Given the fact that there is high correlation between global growth and seaborne trade, unless the GDP growth is higher than the fleet growth, then simply put “the ships are always too many for the cargoes”. With the world growth at 3.3% in 2014 it is evident that the world fleet has been under-utilized and supply has exceeded demand.
In 2015 demolition levels and slippage/cancellations/conversions will be the key. Let’s look at some numbers. The current dry fleet is at 737.65 million tons deadweight while the dry orderbook for 2015 stands at 69million tons deadweight. Assuming that only 80% of this will be delivered (due to slippage, cancellations, conversions etc.) the increase will be 55.2mil tons deadweight. If demolition activity, which has kicked off the year encouragingly, ends up being similar to the levels of 2012, it will be a huge relief valve. In 2012 according to our data about 30million tons dwt was scrapped so if this repeats, the net growth of the fleet will be about 25million tons dwt or 3.4%. This is quite marginal against the projected global growth for 2015 but it may very well signal a balanced supply-demand outlook. So any upside on either the supply (more cancellations, more demolition) or the demand side (the boost to global demand from lower oil prices could be greater than is currently factored into the projections) can reverse the current situation.
The obvious question is if demolition activity can indeed reach 2012 levels. Well, the fleet of ships older than 25 years stands at 29.4mil tonnes i.e. a shade lower than the “required” volume that needs to be scrapped; another 40mil tonnes deadweight are the ships between 20-25 years. In the first two months of 2015, we have already seen much younger vessels sent for scrap. So the relief valve is there and needs to be kept open. Upcoming regulations that will require the shipowners to invest in upgrading their assets will also help in that direction since older assets will not be worth the investment.
So there you have it, there is a quite plausible scenario that can play out this year that can shift things towards the right direction and as long as a series of logical events occur, then we may be looking at a stronger and more balanced 2nd half of 2015. So, Keep Calm and Invest in Dry.
By Theodore Ntalakos
Newbuildings / SnP Broker
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no re-producing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Tuesday, 24 March 15
A WEAK WEEK FOR FOB INDONESIA COAL SWAP
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 drop month on month and week over week.
The Q2 swap fell US$ 2.48 (5.12%) month ...
Tuesday, 24 March 15
RICHARDS BAY COAL SWAP FOR DELIVERY Q2 CLOSED $ 1.87 HIGHER COMPARED TO Q3 CLOSING PRICE
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 declined month over month and week on week.
The Q2 swap has dropped U ...
Tuesday, 24 March 15
ARGUS MEDITERRANEAN SOLID FUELS 2015 CONFERENCE | 2-3 JUNE, ISTANBUL
Press Release: Argus Media is proud to announce Argus Mediterranean Solid Fuels, which will be held in Istanbul,on 2-3February.
Argus produces ...
Monday, 23 March 15
IS OIL GETTING READY TO PLUNGE BELOW $40? - FORBES
KNOWLEDGE TO ELEVATE
In my last crude oil market update in late-February, I expressed my skepticism toward the oil price rebound. Since then, ...
Monday, 23 March 15
Q4' 2015 FOB NEWCASTLE COAL SWAPS DECLINED 6.79% M-O-M; 2.55% W-O-W
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery declined US$ 3.42 per MT (-6.33%) month over month and US$ 1.37 (-2.77%) we ...
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- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- GAC Shipping (India) Pvt Ltd
- Semirara Mining Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- European Bulk Services B.V. - Netherlands
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- Dalmia Cement Bharat India
- Lanco Infratech Ltd - India
- Independent Power Producers Association of India
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Jaiprakash Power Ventures ltd
- Essar Steel Hazira Ltd - India
- Singapore Mercantile Exchange
- Siam City Cement PLC, Thailand
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Gujarat Electricity Regulatory Commission - India
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- PowerSource Philippines DevCo
- Bangladesh Power Developement Board
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Binh Thuan Hamico - Vietnam
- Sarangani Energy Corporation, Philippines
- Meralco Power Generation, Philippines
- Rio Tinto Coal - Australia
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Manunggal Multi Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Renaissance Capital - South Africa
- Bulk Trading Sa - Switzerland
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Energy Link Ltd, New Zealand
- Sakthi Sugars Limited - India
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Marubeni Corporation - India
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Simpson Spence & Young - Indonesia
- Ministry of Transport, Egypt
- Heidelberg Cement - Germany
- Ceylon Electricity Board - Sri Lanka
- Parry Sugars Refinery, India
- Barasentosa Lestari - Indonesia
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Planning Commission, India
- Interocean Group of Companies - India
- Economic Council, Georgia
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Semirara Mining and Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- The Treasury - Australian Government
- Orica Mining Services - Indonesia
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- Asmin Koalindo Tuhup - Indonesia
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Metalloyd Limited - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Energy Development Corp, Philippines
- Mintek Dendrill Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- SMG Consultants - Indonesia
- Central Java Power - Indonesia
- Ministry of Mines - Canada
- Indian Energy Exchange, India
- Maheswari Brothers Coal Limited - India
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Formosa Plastics Group - Taiwan
- Aboitiz Power Corporation - Philippines
- Power Finance Corporation Ltd., India
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Grasim Industreis Ltd - India
- Toyota Tsusho Corporation, Japan
- Medco Energi Mining Internasional
- International Coal Ventures Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Attock Cement Pakistan Limited
- Tata Chemicals Ltd - India
- MS Steel International - UAE
- GVK Power & Infra Limited - India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Goldman Sachs - Singapore
- Petron Corporation, Philippines
- ICICI Bank Limited - India
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Sical Logistics Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- TNB Fuel Sdn Bhd - Malaysia
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Carbofer General Trading SA - India
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Kaltim Prima Coal - Indonesia
- Aditya Birla Group - India
- Cigading International Bulk Terminal - Indonesia
- Mercuria Energy - Indonesia
- Vedanta Resources Plc - India
- Videocon Industries ltd - India
- Central Electricity Authority - India
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Indogreen Group - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Africa Commodities Group - South Africa
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- Chettinad Cement Corporation Ltd - India
- OPG Power Generation Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Directorate Of Revenue Intelligence - India
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Bukit Makmur.PT - Indonesia
- Electricity Authority, New Zealand
- Indo Tambangraya Megah - Indonesia
- Bukit Baiduri Energy - Indonesia
- Baramulti Group, Indonesia
- IHS Mccloskey Coal Group - USA
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Australian Commodity Traders Exchange
- Australian Coal Association
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Makarim & Taira - Indonesia
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