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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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Thursday, 19 March 15
HANDY: INDO COAL CARGOS DESTINED FOR INDIA BEING FIXED IN REGION OF $ 7-8K - FEARNLEYS
Handy
The Handy and Supra market has had a week with mixed signals. Although we see more activity in both hemispheres the rates are only up about ...
Thursday, 19 March 15
INDONESIAN COAL BENCHMARK SOAR 7.69% IN MARCH....!!!
COALspot.com - The Ministry of Energy & Mineral Resources of Indonesia revised up Indonesian coal benchmark prices to US$ 67.76 per MT in March ...
Wednesday, 18 March 15
AVERAGE RATE FOR CAPES MOVED TO BELOW $ 4K/DAY LAST WEEK - INTERMODAL
COALspot.com: The even heavier losses noted in the Capesize segment last week, denied the Dry Bulk market a third weekly positive, while the smalle ...
Wednesday, 18 March 15
PARKING THE CAPES - LINOS KOGEVINAS
It is no secret that recent times have been anything but kind towards shipping, and no sector has suffered more lately than the dry bulk one. While ...
Wednesday, 18 March 15
CHINA-OWNED SHIPS: A RAPID RISE TO BECOME ONE OF THE WORLD'S LARGEST FLEETS - RICHARD SCOTT
Ships operated by owners based in China have become increasingly prominent on the world’s sea routes. China-owned container ships, bulk carri ...
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- Chettinad Cement Corporation Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Interocean Group of Companies - India
- Krishnapatnam Port Company Ltd. - India
- Mercuria Energy - Indonesia
- Wilmar Investment Holdings
- Leighton Contractors Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Edison Trading Spa - Italy
- Indian Oil Corporation Limited
- Asmin Koalindo Tuhup - Indonesia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Pendopo Energi Batubara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- The University of Queensland
- Mjunction Services Limited - India
- Xindia Steels Limited - India
- Larsen & Toubro Limited - India
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Mercator Lines Limited - India
- Deloitte Consulting - India
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- Meenaskhi Energy Private Limited - India
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- Altura Mining Limited, Indonesia
- Price Waterhouse Coopers - Russia
- PetroVietnam Power Coal Import and Supply Company
- Essar Steel Hazira Ltd - India
- Alfred C Toepfer International GmbH - Germany
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Posco Energy - South Korea
- Jindal Steel & Power Ltd - India
- Singapore Mercantile Exchange
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- India Bulls Power Limited - India
- MS Steel International - UAE
- Directorate Of Revenue Intelligence - India
- Kepco SPC Power Corporation, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- GVK Power & Infra Limited - India
- Semirara Mining Corp, Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Antam Resourcindo - Indonesia
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- Sindya Power Generating Company Private Ltd
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Commonwealth Bank - Australia
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Power Finance Corporation Ltd., India
- SMG Consultants - Indonesia
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SN Aboitiz Power Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Planning Commission, India
- Trasteel International SA, Italy
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Semirara Mining and Power Corporation, Philippines
- PowerSource Philippines DevCo
- Vedanta Resources Plc - India
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Ministry of Mines - Canada
- LBH Netherlands Bv - Netherlands
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Latin American Coal - Colombia
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Formosa Plastics Group - Taiwan
- Siam City Cement - Thailand
- PTC India Limited - India
- Therma Luzon, Inc, Philippines
- Coalindo Energy - Indonesia
- Sojitz Corporation - Japan
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- Parliament of New Zealand
- Rio Tinto Coal - Australia
- Straits Asia Resources Limited - Singapore
- Timah Investasi Mineral - Indoneisa
- Romanian Commodities Exchange
- Gujarat Mineral Development Corp Ltd - India
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- SMC Global Power, Philippines
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Holcim Trading Pte Ltd - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Goldman Sachs - Singapore
- Ind-Barath Power Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Georgia Ports Authority, United States
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- CIMB Investment Bank - Malaysia
- Gujarat Sidhee Cement - India
- Kohat Cement Company Ltd. - Pakistan
- Lanco Infratech Ltd - India
- Sical Logistics Limited - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- International Coal Ventures Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- London Commodity Brokers - England
- Vijayanagar Sugar Pvt Ltd - India
- Dalmia Cement Bharat India
- Attock Cement Pakistan Limited
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- South Luzon Thermal Energy Corporation
- Africa Commodities Group - South Africa
- Indogreen Group - Indonesia
- Australian Coal Association
- Marubeni Corporation - India
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Salva Resources Pvt Ltd - India
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Wood Mackenzie - Singapore
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- New Zealand Coal & Carbon
- The State Trading Corporation of India Ltd
- Economic Council, Georgia
- Thai Mozambique Logistica
- Aditya Birla Group - India
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Savvy Resources Ltd - HongKong
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Global Coal Blending Company Limited - Australia
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